TREND

Used car imports steady despite depressed market prices

More than 8,500 units coming in every month

In Summary

•Car importers have noted a 20 per cent increase on imports this months compared to between March and June, when the global supply chain was widely disrupted by Covid-19.

•The units are mainly coming from Japan, which dominates the Kenyan second-hand car market with more than 80 per cent share.

Imported vehicles parked at a yard in Mombasa/ JOHN CHESOLI
Imported vehicles parked at a yard in Mombasa/ JOHN CHESOLI

Imports on second-hand cars are on the rise with growing demand for the units despite low price margins in the local market, occasioned by falling purchasing power by individuals.

Car importers have noted a 20 per cent increase on imports this month compared to between March and June when the global supply chain was widely disrupted by Covid-19.

The units are mainly coming from Japan, which dominates the Kenyan second-hand car market with more than 80 per cent share.

Other sources are United Arab Emirates, United Kingdom, Singapore and South Africa.

According to the Car Importers Association of Kenya (CIAK), the picking global supply chain, coupled with the lifting of cessation of movement in Kenya in July, has allowed movement of units from the international markets to different selling points in the country, where dealers are operating showrooms.

Individuals are also able to access about 400 showrooms for used cars in Mombasa, which take up a huge portion of vehicles that land at the port.

Average monthly imports have increased from between 4,000 and 7,000 two months ago, to above 8,500.

About 3,086 units have come into the country between Saturday and today alone, as five motor vehicle carrying vessels dock at the port.

The biggest single discharge is from conventional vessel–Hoegh Trove which arrives today with 1,400 units.

Unit prices however remain depressed as households struggle with job losses and tough living conditions, which have cut spending abilities on luxury.

“Imports are on the rise and people are buying though the purchasing power has gone down. It is not business as usual,” CIAK national chairman Peter Otieno told the Star in a telephone interview.

Before Covid-19 hit the country, monthly imports were averaging 9,000 to 12,000.

“As the country opens up and the economy slowly recovers, the government needs to put in place more incentives to support businesses, most which are on their knees right now and facing closure,” Otieno said.

The traditional Sunday car sale in Nairobi– Jamhuri Auto Bazaar resumed yesterday after a six months closure. The last sale was on March 8. 

Individual showrooms and yards , common along Ngong Road, Kiambu Road among other areas, have reported low business, which the Kenya Auto Bazaar Association (KABA) attributes to lack of purchasing power by most individuals, in a market faced with job losses.

KABA Chairman John Kipchumba has noted reduced activities at the weekly Jamhuri Auto Bazaar in weeks to come.

"Vehicles are there but buyers are struggling. With all these job losses, banks are not giving the finances as before, so it makes it difficult for many people to buy units,” Kipchumba told the Star yesterday.

Sellers are torn between selling units at lower prices and remaining with their stocks, he said, indicating the current market forces are likely to drive car prices down.

“We have resumed the Sunday bazaar. Some people might be forces to take what is there based on individual needs,” Kipchumba said, “There is no business.”

The more than 30-years old auto bazaar attracts about 2,000 second-hand cars and 3,000 customers every Sunday when business is normal.