Monthly average imports now stand at between 5,000 and 7,000, from 12,000 units that the country used to import monthly pre-Covid.
The low availability of used vehicles is mainly attributed to the growing chip shortage which has since 2020 affected assembly lines across the world.
The chips, or semi-conductors shortage started being felt at the height of the Covid-19 pandemic which disrupted the global supply chain.
It was worsened by the Russia-Ukraine conflict this year. The two are key exporters of raw materials used in the manufacturing of various microchips.
This includes palladium heavily used in making memory and sensor chips, with Russia accounting for 45 per cent of the global supply.
Automakers have been forced to cut production as they lack enough chips to power latest technology models, where most electronic components require the material to function.
Used cars owners in Kenya's source markets like Japan, Singapore and the UK are reportedly holding-on longer to their vehicles due to the shortage, and the rise in new car prices.
“The rate at which car owners in these markets are availing used cars for re-sale has remained low,” Car Importers Association of Kenya (CIAK) National Chairman, Peter Otieno, told The Star yesterday.
Dealers have also reported low business as the country heads into the general elections, citing low spending power.
Traditionally, elections have been a booming season for car dealers as politicians spend on campaign fleets.
“Thing are different this year. There is very little spending on cars compared to past elections,” Otieno noted.
Meanwhile, the dollar shortage has also affected imports with the weak shilling adding up to the high car prices locally.
For instance, a Toyota Probox has an asking price of up to Sh1.2 million, up from Sh620,000-Sh850,000.
Mazda Demio which would sale at between Sh500,000-600,000 in pre-covid error is now near the million mark.
A used imported Toyota Vitz has hit a Sh1.3 million mark in some dealer shops.
Nissan X-Trail imported into the country is selling at above Sh2 million from an average Sh1.5 million two years ago. New models are fetching up to Sh4.4 million.
Toyota Axio is selling at about Sh1.4 million on average, up from an average of Sh1 million.
The high prices and the existing shortage have seen local buyers go for third-generation cars (second-hand cars that have been used locally.
According to the Kenya Auto Bazaar Association (KABA), there has been rising demand for these units at the weekly Jamhuri Auto Bazaar, since May this year.
“This has also triggered price increased for the third-generation cars,” chairman John Kipchumba said, with margins of up to 30 per cent.
prices of these cars being sold at the bazaar,” KABA
A locally used Toyota Probox is currently going for about Sh700,000 from a low of Sh400,000 while an imported used one is priced at Sh1 million on average from about Sh700,0,000.
Another substitute for imports is the refurbishing of old and abandoned cars by local mechanics and workshops, KABA notes.
Japan, which is the biggest source market for Kenya’s used cars (80%), is currently putting in place measures to address the production and supply chain hiccups.
The Ministry of Economy, Trade and Industry (METI) has put in place an Automotive Semiconductor Supply Chain Working Group in cooperation with domestic automobile manufacturers and industry observers.
They include Isuzu Motors, Kawasaki Motors, Suzuki, Subaru, Daihatsu Motor Corporation, Toyota, Nissan, Hino, Honda, Mazda and Mitsubishi , Yamaha and UD Trucks.
“From its inception, it has been discussing how to guarantee a stable supply of semiconductors for use in automobiles,” the ministry said on July 1.
The working group is currently in the process of releasing an interim report on how to make automotive supply chains resilient.
This report will cover automotive semiconductors and other components as well.
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