New car sales forecast to dip by 20pc

The local motor vehicle industry expects a dip in sales of new units this year, sustaining the decline for the second year in a row on the back of reduced spending by companies and Government.

It projects the number of new vehicles sold by end of this year to drop to 10,927 units, a 20 per cent decline compared to 13,535 in 2016. This is nearly half of those sold in 2015 when the industry moved 19,523 units.

According to data from the Kenya Motor Industry Association (KMI), in the 10 months to October, the sector sold 8,972 vehicles, a 22 per cent decline compared to 11,535 units sold over the same period in 2016.

KMI has attributed the decline to, among other factors, the prolonged elections period that has resulted in customers, including Government, companies and individual Kenyans spending less on vehicles.

Other than the August 8 polls and the repeat presidential election in October, the industry notes that the country went into campaigns way ahead of the elections, sending many clients into a wait-and-see mode since early 2016.

Among the segments that have been hit substantially by the reduced spending include earth movers as well as large and medium buses. There was also a 53 per cent reduction in the number of prime movers sold over the 10 months.

The only segments whose sales have grown during the year are medium-sized trucks and mini-buses. Sales for mini-buses, which are popular among public service vehicle operators, grew 52.2 per cent. Medium trucks grew 10 per cent.