Vehicle Sales Slowed Down by Election Tension

Vehicle sales have dropped for the past nine months for the year ended September, a situation that is linked to the Kenyan general elections.

Data from the Kenya Motor Industry Association (KMI) shows that Isuzu East Africa, Toyota Kenya, and Simba Corp sold a total of 9,868 units in the review period. This marked a drop of  1.75 percent drop from 10,044 units the year before.

“The August election jitters contributed to the marginal decline.” Rita Kavashe, the chief executive of Isuzu said. “Given the peaceful election and timely completion of the Supreme Court case following the disputed election, end-year sales are likely to close at the same level as last year.”

Ms. Kavashe noted that the sales are still slow since the new administration is being set up and there are plans that the government spending will be cut down to 360b.

The biggest clients of the dealers is the state and it accounts to over a fifth of total sales. However the CEO of Isuzu noted that they are recovering slowly and the industry is witnessing a good recovery in terms of demand from retail and corporate clients. She added that delayed payment of pending bills by county governments remains a challenge for the new vehicle dealers.

While the industry recorded a marginal decline in orders in the nine months to September, there were divergences in performance as some players recorded higher sales and grew their market share.

Sales of Isuzu, for instance, rose to 4,451 from 4,104 and the dealer raised its market share by 4.2 percentage points to 45.1 percent.

As part of a partnership with its brand ambassador and marathon champion Eliud Kipchoge, the company announced that it will sell 159 special edition Isuzu D-Max pick-ups next year.

Toyota Kenya, the second-largest dealer, increased sales by a small margin to 2,240 from 2,386. Its market share, however, fell slightly from 23.8 percent to 22.7 percent.

The industry is yet to recover and  match its most recent sales peak of 19,253 units in 2015. In order to create local jobs and skills while also accelerating technology adoption, the government has been implementing a series of incentives to encourage the growth of the local vehicle assembly business.