Dealers of new vehicles have
had a good half-year run in 2025, as sales for the year-to-June jumped 25 per
cent compared to last year.
Latest industry numbers by
the Kenya
Motor Industry Association (KMIA) shows
the 11 local dealers also serving regional markets sold 6,360 units in the six months,
compared to 5,086 sold over same period last year.
The Kenyan market took the
lion's share of these units, where 6,254 vehicles were sold locally, up from 4,982
same period last year, a 25.5 per cent growth.
The strong performance has
since been pegged on the stable interest rates and strong performance in key
sectors of the economy, mainly agriculture, building and construction, transport
and logistics and service sectors.
This is reflected in the
vehicle categories most sought, where trucks composed the highest number of unit
sales during the period (2,577), followed by pick-ups (1,344 units comprising 830
single cabins and 514 double cabins).
Dealers also sold 686 buses
during the period with the matatu industry remaining a major off-taker, while
prime movers sold total 432 units.
Isuzu East Africa retained
its dominance with a total of 3,075 units sold (43.3% of the total industry sales).
CFAO accounted for 31.7 per cent with 2,017 units with Simba Corporation
(ex-Simba Colt Motors) closing the top three in dealership with 547 units.
“Call
stable interest rates, agriculture growing because of increased productivity and affordable fertiliser. Construction projects
creating demand for sand and
building materials,” Isuzu East Africa
managing director, Rita Kavashe, told the Star.
CFAO Mobility Kenya managing director Arvinder Reel also pegged the firm’s sales on a rebound in key
sectors of the economy.
“The market has bounced back and we at CFAO have had a
very good first half on the account of Land Cruiser and HiAce sales,” Arvinder
Reel told the Star.
Central bank of Kenya has since
June last year been making downward adjustments on the banking sector
base-lending rates to spur credit to the private sector and households.
The rate has since dropped
to a two-year of 9.75 per cent from a high of 13 per cent in June last year.
Growth in commercial bank lending to the private sector stood
at two per cent in May 2025
compared to 0.4 per cent in
April, and -2.9 per cent in
January 2025, according to CBK.
“This
reflects improved demand in line with the declining lending interest rates. Average commercial banks’ lending rates
declined to 15.4 per cent in
May 2025, from 15.7 per cent in
April and 17.2 per cent in
November 2024,” Governor Kamau Thugge
said.
Second-hand
imports, however, remain the most
preferred vehicles in Kenya, mainly by
households, due to their affordability compared to new ones.
Monthly imports range between 8,000 and 12,000 with Japan accounting
for about 80 per cent of these units. Other key sources are UAE, UK, Singapore and South Africa.
According to the Car Importers Association of Kenya (CIAK), new units which are locally assembled or full-built imports are expensive by more than
Sh600,000, compared to imported used cars where some are even more superior
than the new ones.
The country imports about 130,000 second-hand vehicles
annually at about Sh60 billion, with used cars enjoying 85 per cent of the
market share.
