Locally assembled vehicle production in Kenya decreased by 12.5 percent between January 2023 and November 2024, mirroring a sharp decline in sales as East Africa’s largest economy grapples with tough economic times.

Statistics from the Kenya National Bureau of Statistics (KNBS) Leading Economic Indicators report, shows the production of assembled vehicles was highest in 2022 when the country produced about 13,000 vehicles. 

Since, then there has been a steady decrease as locally assembled units contracted to 10,844 in 2024 from 12,393 recorded in the previous year.

At the same time, industry data from the Kenya Motor Industry Association shows that new vehicle sales experienced a slowdown last year as dealers found themselves in a challenging business environment marked by high taxes and reduced government purchases. 

Transport, construction, agriculture, and retail industries helped drive demand for specific vehicle categories. Trucks (3,939), pickups (3,133), buses (1,205), and prime movers (522) remained the top-selling vehicles during the period according to the latest industry data.

Overall, Isuzu led the market at 47.5 per cent share with 5,390 units sold. CFAO Motors Kenya followed with a 33.4 per cent share, selling 3,789 units, while Simba Corp Limited rounded out the top three with 977 units.

According to the report, the country’s 11 major dealers sold a total of 11,352 units, which included 293 vehicles sold in export markets. This represented a slight decline from the 11,370 units sold in 2023 and the 13,352 new vehicles sold in 2022.

"Interest rates went up 20 percent, making it difficult for some customers to buy new products," said Isuzu East Africa managing director Rita Kavashe.

"There is also the aspect of pending bills, where most customers in the construction sector and other areas have not been paid for work done," Kavashe explained that this cash flow challenge is causing delays in the execution of projects, thereby affecting the procurement of new project vehicles.

During the eleven-month period, second-hand imports continued to dominate the market, mainly due to their affordability compared to new vehicles. 

The decline in vehicle production has also been compounded by the challenges facing major assemblers. Last week, CMC Motors announced its exit from East Africa’s auto industry citing tough business environment.

“For over 40 years, CMC Motors has been a key player in East Africa’s agricultural sector, providing essential mechanization solutions and unparalleled customer support. This decision was not made lightly but is the outcome of a comprehensive evaluation of our operations,” the statement read in part.

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