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Pandemic exposes yawning gap between Kenya’s rich and poor

By Peter Theuri | August 12th 2020 at 12:00:00 GMT +0300

Covid-19 may have devoured many Kenyans’ earnings, but there are those who are still enjoying the finer things in life, exposing the yawning divide between the rich and the poor.

According to data from Kenya Motor Industry Association (KMIA), luxury vehicle sales have largely remained the same in the months since Covid-19 tore through the Kenyan economy.

To illustrate this, by the time luxury automotive distributor and retailer Inchcape Kenya launched the new Land Rover Defender 110 in the middle of the pandemic last week, the $140,000 (Sh15.1 million) luxury on wheels already had five pre-orders.

Further, according to KMIA data, DT Dobie sold 23 Volkswagen units in January, a month when a majority of Kenyans are struggling to make ends meet after spending heavily in December. Sales increased to 25 units in February.

Covid 19 Time Series

 

In March, when the first Covid-19 case was recorded in Kenya, the distributor sold 21 units, and a similar number in April.

While sales have taken a bit of a hit since then, the drop is nowhere close to that witnessed in commercial vehicles.

Market leaders, including Isuzu and Toyota, have been the most affected, as commercial vehicle sales plummet.

On the flip side, luxury vehicles have held their own.

BMW, for instance, has been selling an average of two units a month since the pandemic began in March.

Mercedes sold eight units in March, which increased to 11 in April and in May, before dropping to eight in July.

The affluent defied the prevailing economic hardships to increase orders for luxury cars by 14.5 per cent in the six months to June, KMIA data shows.

Mercedes and BMW largely contributed to the rise in orders for high-end cars, with 79 units in the review period compared to 69 units last year.

Luxury car sales outpaced the entire new vehicle market, whose orders fell 26.4 per cent to 4,628 units from 6,294 over a similar period in 2019.

However, KMIA attributes the steady sale of premium vehicles in the middle a rapidly unfolding economic crisis to orders made before the disease was detected in Kenya.

“Some of these are pre-orders that are arriving now,” said Caroline Wamai, the marketing manager at DT Dobie.

She anticipates a drop in sales as Covid-19 continues battering the economy.

Another explanation for the steady sales of luxury vehicles is the uncertainty created by Covid-19, which has seen some Kenyans spend over hoard. 

“Many people are buying cars now because Covid-19 creates uncertainty. It brings about a situation where one does not know what tomorrow brings. So, those with the money are making purchases,” observed Wamai in an earlier interview.

It is the concept of ‘Yolo’ - ‘you only live once’, a phrase turned into a rallying call to make the most of the present. 

But a stroll down many urban streets confirms this is not something every Kenyan can afford to do. 

Luxury cars may cruise by every few minutes, moving with grace and grandeur, the sun glinting off tinted windows, the hum of their V12 engines barely audible. But perched along these same streets are a rapidly growing number of street families.

A survey carried out by the Kenya National Bureau of Statistics and released in June found one in three Kenyans has not had to adjust their spending despite the pandemic.

In his classic novel, The Animal Farm, George Orwell stated that all animals are equal, but some are more equal than others. Few other things have brought out this stark reality better than Covid-19 has.


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