Auto industry in crisis on expensive dollar, plummeting demand

Sales on luxury cars like BMW and Mercedes, have dropped 65.5 percent according to Kenya Motor Industry Association (KMIA) with sales in the entire auto industry dropping 13.9 percent, attributed to rising inflation and interest rates hike, affecting demand.

The auto industry is entering a period of turmoil as expensive dollar makes cars more expensive driving down demand for units at a time Kenyans are battling with high cost of living and stagnant wages.

Kenya National Bureau of Statistics data showed Kenyans have cut back on luxury cars and are only buying matatus and lorries for business.

Economic Survey data shows, the total number of newly registered motor vehicles recorded a decrease of 7.6 per cent from 107,499 in 2021 to 99,365 in 2022.

Only 6,350 saloon cars were imported into the country down from 8,170 while station wagons were own from 64,350 to 55,004 signaling the reduced number of consumptive imports.

There was an uptick on vehicles typically used for business like busses and lorries. The number of newly registered buses and coaches more than doubled from 893 units in 2021 to 2,173 in 2022.

Similarly, there was a significant rise in the number of newly registered panel vans and pick-ups from 5,986 units in 2021 to 10,901 units in 2022.

The number of lorries/trucks, minibuses/matatus and trailers rose by 42.5, 10.3 and 8.5 per cent, respectively.