Sales at new luxury car dealerships drop 22%

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Sales at new luxury car dealerships drop 22%


New luxury car dealers saw sales fall 22.2% in the nine months to September, with demand for BMW and Mercedes models falling the most. PICTURES | NMG

New luxury car dealers saw sales fall 22.2% in the nine months to September, with demand for BMW and Mercedes models falling the most.

Dealerships led by DT Dobie and Inchcape Kenya moved 84 units during the reporting period compared to 108 units a year earlier, according to data from the Kenya Motor Industry Association.

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The luxury segment underperformed the overall new vehicle market, which saw a marginal decline in sales of 1.75% to 9,868 units over the same period.

The mixed performance continues the long-standing trend of commercial vehicle dealerships dominating, aided by strong government and business demand in addition to policy restrictions on used truck imports.

Mercedes sales fell from 43 to 33, but German car models remained the top-selling brand in the country. Mercedes cars are sold by DT Dobie. BMW orders followed, dropping from 30 to 21. Inchcape Kenya started selling BMW cars in early 2019 after taking over the franchise from Simba Corp.

Jaguar car sales fell to one in four. Orders for Land Rover models – including Ranger Rover – remained unchanged at 29. There were no sales of Porsche and Bentley models during the reporting period, having seen demand for just one unit each a year earlier.

Porsche is expected to find a new dealership in the local market after the contract with Porsche Center Nairobi – part of the Multiple Hauliers group of companies – was terminated by German automaker Porsche AG in January 2021.

Bentley Nairobi, also affiliated with Multiple Hauliers, is no longer listed as a dealer by Bentley Motors.

Franchise transfers typically hurt sales in the short term, as the licensed dealer focuses on clearing inventory and the new appointee takes time to settle.

In addition to sluggish demand, sales of premium cars are also being held back by production slowdowns due to shortages of semiconductors essential to the operation of modern vehicles.

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Automakers say they are prioritizing making and marketing high-margin models as they scramble to secure reliable sources of semiconductors.

“Wholesale volumes were 75,307 units during the period (excluding our joint venture in China), up 4% from the prior quarter ending June 30, 2022,”

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