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Covid wipes out 2,100 car sales but December was best month

BUSINESS
By Peter Theuri | January 31st 2021

Car yard in Hurlingham, Nairobi. [David Njaaga, Standard]

That 2020 drove the world crazy is an unfunny paradox, especially because car sales in the country tanked significantly in the year.

Kenya Motor Industry Association (KMI) data show that between February and August 2020, activity in the motor industry was well below par, compared to the previous two years.

For the whole year, the local motor dealers had 2,113 car units shaved off their sales compared to 2019, as only 11,086 cars left showrooms. In 2019, the dealers sold 13,199 units.

But December 2020, which was the best month for the local car industry with sales of 1,287 units, had better sales than December 2019, when 1,124 cars were sold. It even bettered 2018’s December, when 1,097 units were sold.

This showed resilience amid the coronavirus pandemic that continued to devastate earnings and consequently affected spending.

The December 2020 figure was more than twice the numbers recorded in May when, with a sweeping pandemic forcing restrictions on movement and clamping down on people’s spending, the industry was responsible for the sale of only 566 units.

Market leaders Isuzu finished the year with sales of 4,340 units, a 39 per cent market share. Toyota, 2,426, and Mitsubishi, 1,528, also crossed the 1,000 mark.

And a total of 11,086 units were sold in the year, a decent number after a year that, from March when the first case of Covid-19 was reported locally, did not show much promise.

“Following the travel restrictions put in place between March and July to contain the spread of coronavirus, we saw business slow-down considerably,” said Wanjohi Kangangi, Isuzu East Africa Sales and Marketing Director.

“However, there was an improvement as the government introduced the economic stimulus package for various sectors back in May. The automotive sector was among the eight sectors selected for support with Sh600 million being set aside to purchase locally assembled vehicles. This encouraged our resilience to sustain our operations through the difficult season.”

At their lowest, Isuzu sold 179 units, in April, a far cry from 455 sold in each of August, September and December.

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“The easing of inter-county travel restrictions in July saw a gradual economic recovery driven by Small and Medium Enterprises (SMEs) who have strongly supported our business. Thanks to our customers’ outstanding support, we managed to close the year with an increased market share, maintaining our leadership of new vehicle sales for nine years in a row since 2012,” Kangangi said.

But even then, 2020, in spite of a fleeting resilience in the second half, was way slower than 2019, and a far cry from 2018 in terms of sales.

KMI’s data shows that in 2018, the companies sold 14,353 units. In 2019, they were 13,199. And then in 2020, the numbers went down to just over 11,000.

But while the industry saw a slowdown, DT Dobie increased their volume sales by 9.4 per cent across their product range of cars, pick-ups, Sport utility vehicles (SUVs) and prime mover trucks in 2020 than in 2019.

DT Dobie made considerable truck sales in the year.

“The most dramatic rise in sales by DT Dobie was achieved in the 3.5 to 9-tonne light truck segment with the sale of 142 Hyundai units compared with 73 in 2019. In December, the company introduced the EX9 model to add to the five and seven tonne versions which have been locally assembled at the KVM plant in Thika for over eight years,” said DT Dobie.

“The main users of Hyundai trucks are bakeries and distributors of fast moving consumer goods, but the trucks are also popular with manufacturing companies and transporters. A significant number have covered more than 500,000 kilometres with only routine maintenance and minor repairs.”

2020 was also good for Volkswagen cars, SUVs and passenger and cargo vans which increased from 212 to 238. “The biggest selling Volkswagen was the compact Polo Vivo which in 2016 became the first ever locally assembled German car in Kenya followed by the Caddy Kombi.”

As commercial vehicles’ sales dipped, so did luxury vehicles’.

Mercedes Benz units declined from 268 to 180 in 2020, as Porsche’s sales went from 27 in 2019 to 25. Land Rover units (in 2019 sold by both RMA and Inchcape) reduced from 41 to 36. And the Jaguars went down by a unit, from seven to six in the two years.

In contrast, 51 units of Porsche had been sold in 2018. 114 Land Rovers were sold that year, with 22 Jaguars and 196 Mercedes Benzes also leaving the showroom.

Isuzu sold 4,632 units in 2018, in which their highest selling month was August, (yielding 648 units) and the lowest being January with 263. In 2019, units sold by end of the year were 5,158, the highest in a month 542 (May) and the lowest (278) January.

But in 2020, they sold 4,240 units, the highest at 455 (in three separate months) with the lowest at 179, in April.

Is the trend creating fear of a possibly worse future in the company? “The market outlook for 2021 is positive and is likely to remain so as we expect continued government spending on various infrastructural development projects,” Kangangi says.

There will be a reprieve for the local car manufacturers after the government announced plans to phase out importation of second-hand vehicles by 2026 to spur the growth of local car assembly.

Covid 19 Time Series

 

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