Sale of High-end Cars Dip on Inflation- KMIA

Easing supply chain bottlenecks saw car makers increase their sales volumes by 1,116 units last month, bringing the total number of new vehicles sold between January and September 2022, to 9,868 units.

This, by contrast, represents a difference of 176 more units in the sale of brand-new vehicles sold in a similar period last year, which stood at 10,044 units.

Latest industry data by the Kenya Motor Industry Association (KMIA) also shows that the super-rich bought fewer luxury cars than they did last September, due to the high inflationary pressures seen in the last months.

The data shows that the sale of high-end cars dropped significantly last month with 197 units of Mercedes, BMW and Jaguar brands being sold during that period compared to a collective total of 208 units for the three brands which were sold last September.

While the monthly total sales returned an impressive year–on–year total sales performance, the dip in sales according to KMIA, was due to uncertainty surrounding the just-ended General Elections whose outcome saw former Deputy President William Ruto declared the fifth President.

Typically, the months of September and December tend to see car manufacturers extend discounts to get sales across the line, but with the Central Bank of Kenya aggressively hiking interest rates to fight inflation, consumers could find it tough to finance new cars compared to early in the year.

In return, this could cut the demand and add new pressure to the auto industry, which had been struggling with depleted inventories during the pandemic even before the European war broke in February.

The country’s annual inflation accelerated for the seventh consecutive month to 9.2 percent in September, above market forecasts of 8.6 percent and the ceiling of the Central Bank’s target range of 2.5 percent to 7.5 percent.

Last month saw the services sector rebounding in September for the first time since March, as companies stepped up hiring on stronger growth orders.