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Growing middle class steps up competition in sports car market

BUSINESS
By Jackson Okoth | Sep 14th 2014 | 3 min read
By Jackson Okoth | September 14th 2014
BUSINESS
Porsche officials during the Macan model launch in Nairobi recently. The Germany auto maker has opened the Kenya office to tap into the growing demand for stylish luxury vehicles. [PHOTO: Courtesy]

Nairobi; Kenya: Competition for a share of the sports car market has intensified, following the entry of Macan, a sports utility vehicle (SUV) sold by German auto maker Porsche.

Other SUVs available in Kenya include Chevrolet Trailblazer LTZ SUV, Hummer and Chevrolet Captiva models all sold by General Motors East Africa Ltd and the Range Rover sport in the RMA Motors stable. Also on the list of SUVs available in Kenya is the Jaguar F-type a two seater sports car with a supercharged 5.0 litre V8 engine.

Dealers attribute rising demand for sports cars to their luxury nature, prestige and the brand name. With economic growth prospects on the rise following mineral discoveries in Kenya, and an expanding middle class, luxury car dealers are finding the country's car market attractive.

"Kenyans love brands particularly premium ones. This is also true of smart phones, iPhones, iPad and so on. There is also more disposable income amongst the middle class with road networks also improving slowly," said Sanjiv Shah, Chief Executive of RMA Motors, the franchise holders for the Range Rover sport. RMA presently controls 6.12 per cent of the SUVs market.

While the new car market is growing steady, it is always looking over its shoulders not to be overtaken by the second-hand cars market. Dealers are confident of a robust auto market in Kenya as consumers become more attracted to the new models and opposed to second-hand vehicles.

"Although the environment has been challenging, we have crafted a robust business plan that will make us survive in this market. Customer response has been overwhelming and the market is ripe for a Porsche brand," said Roy Kyalo, Brand Manager at the Porsche Centre in Nairobi.

"We are unveiling the new Porsche Macan, a real sports car with excellent usability, superior handling characteristics, featuring exceptional acceleration, vast engine power, extreme agility and optimum steering precision," said Adrian Wayne, regional sales manager of Porsche Middle East and Africa.

Porsche has priced its two new sports car models at Sh9.3 million and Sh 9.8 million for the Turbo version.
Available figures indicate that on a global scale, 1.3 million SUVs were sold last year. This figure is projected to reach 1.8 million by 2024 and that the SUV segment will grow at the rate of 3.4 per cent for the next ten years.

While dealers are expanding into Kenya, a big potential market is the second-hand luxury cars. Given the high taxes applied to new imported vehicles, including premium cars and the appetite by Kenyans to drive around in the most prestigious models, second-hand luxury cars market will inevitably emerge.

Another threat to the coffers of new luxury car dealers is the booming trade in stolen cars. A recent incident involving theft of a presidential BMW car in Kenya could be an indicator of how daring these crime car thieves are.

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