Motor vehicle importers in Kenya have recorded losses running into billions of shillings after sales and imports dipped in 2020.
Charles Munyori, Secretary-General of Kenya Auto Bazaar Association (KABA) stated that the year posed a challenge especially after the outbreak of Covid-19.
The economic disruption also reduced the demand for vehicles in the country. Munyori said that second-hand models account for over 85 percent of all imported vehicles in Kenya.
Data by the Kenya Revenue Authority (KRA) disclosed that import of new and used automobiles declined by 7 percent in the year ending December 2020, compared to the same period in December 2019. 85,624 were imported in 2020 while 92,120 units were imported in 2019. This indicates that the imports declined by 6,496.
Units imported between January and June 2020 dropped by 30.2 percent to 34,054 as 48,839 had been imported in the same period in 2019.
However, the sales and imports rose by 19.1 percent between June and December 2020 as 51,570 units were imported in that period as compared to 43,281 imported between June and December 2019.
Munyori credited the surge to the lifting of Covid-19 restrictions by the government and the decline of car prices globally.
"Prices of vehicles in the international markets declined significantly because of reduced demand. Importers took advantage of this and imported more units expecting a recovery in demand," he said.
Second-hand dealers recorded lower losses as compared to importers selling new automobile models. The government, however, seeks to bar the imports of second-hand cars to promote locally assembled vehicles.
Treasury CS Ukur Yatani, on Monday, January 25, said that the government will phase out second-hand cars by 2026. The car dealers had up to 2023 to import secondhand vehicles in an earlier plan unveiled in 2019.
The new proposal will offer them reprieve as they were to be out of business within two years. The industry rakes in approximately Ksh 60 billion annually.
On Thursday, December 10, President Uhuru Kenyatta commissioned the local assembly of Proton Saga saloon cars at the Associated Vehicle Assemblers (AVA) in Miritini, Mombasa County.
A month later, local carmaker Mobius Motors also opened a new Ksh330 million manufacturing plant in Nairobi. All these work towards promoting Kenyatta’s Big 4 Manufacturing Agenda.
