Used car sales pick as buyers access Mombasa

Sale of used imported cars has picked in the last two weeks as buyers access showrooms in Mombasa, according to dealers.

This is after President Uhuru Kenyatta lifted the cessation of movement order that barred entry into and out of Nairobi, Mombasa and Mandera Counties, which lapsed on July 6.

The ban which was in place for about three months locked out potential car buyers from traveling to the port city, favoured by seekers of imported units.

Mombasa has more than 400 showrooms for used cars that land at the port, with the country having a monthly import of up to 12,000 before business disruption by the Covid-19 pandemic.

The Car Importers Association of Kenya (CIAK) said sales are currently at about 25 per cent, and continues to pick, with demand for cars remaining stable despite squeezed households’ spending power during the Covid-19 period.

“We had lost up to 95 per cent of business because buyers could not come to Mombasa. The majority of our customers are from Nairobi, Kisumu and other parts of the country,” CIAK national chairman, Peter Otieno, told the Star on the telephone.

Cars pile up in Mombasa port as cessation order continues

Movement affected by measures to curb Covid-19

BUSINESS

2 MONTHS AGO

Effects of Covid-19 on the economy also saw sales for new vehicles drop by 25.9 per cent between January and June.

Kenya Motor Industry Association (KMIA) data shows total units sold for the entire new vehicle market between January – June 2020 were 4,570, compared to 6,175 units sold in a corresponding period in 2019.

Leading brands such as Toyota, Isuzu, Mitsubishi, and Ford have struggled to move new units in the local market.

According to Toyota Kenya, the biggest impact on sales has been over the four-month period between March and June 2020, experiencing a 39 per cent decline in sales compared to the same period in 2019.

“June 2020 has shown some positives, with a 48 per cent increase in sales compared to May 2020. We are optimistic that this positive trend will continue as the government puts in place guidelines that will help in re-opening the economy,” Managing Director Arvinder Reel said.

Used cars enjoy 85 per cent share of the country’s motor vehicle market, due to the high price of new units.

Buyers in this segment, spend an estimated Sh60 billion annually on imported second-hand cars whose prices range from as low as Sh500, 000 to an average Sh2.5 million. 

Monthly imports for the units are currently at between 4,000 and 7,000, CIAK said yesterday.

During the cessation period, importers depended on load carriers and the SGR to move units that had direct orders, with those destined for sale at showrooms remaining in Mombasa.

“We were importing but most units were not moving out of Mombasa,” Otieno said, “carriers are also expensive so business was low. It is however picking up well.”

The country imports about 130,000 second-hand vehicles annually mainly from Japan, United Arab Emirates, United Kingdom, Singapore and South Africa.

Japan dominates the Kenyan second-hand car market with more than 80 per cent share.