Sales at new vehicle dealerships rise 11% in the first quarter

Industry

Sales at new vehicle dealerships rise 11% in the first quarter


Arvinder Reel, Managing Director of Toyota Kenya. FILE PHOTO | NMG

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Summary

  • Sales of new motor vehicles rose 11.7% in the first quarter ended in March, helped by economic growth.
  • Data from the Kenya Motor Industry Association (KMI) shows that official dealers including Isuzu East Africa, Toyota Kenya and Simba Corporation sold 3,203 units during the reporting period, up from 2,867 units a year earlier.
  • Toyota dealership CFAO Motors Kenya recorded the strongest sales growth among major dealerships in the first quarter ending March.

Sales of new motor vehicles rose 11.7% in the first quarter ended in March, helped by economic growth.

Data from the Kenya Motor Industry Association (KMI) shows that official dealers including Isuzu East Africa, Toyota Kenya and Simba Corporation sold 3,203 units during the reporting period, up from 2,867 units a year earlier.

This performance marks the continuation of the recovery in the sector, which suffered a drop in sales in 2020 due to the impact of the Covid-19 pandemic, including movement restrictions, trade disruptions and a drop in revenues from businesses and households.

Economic growth contracted 0.3% in 2020 but recovered to post 7.6% growth last year after restrictions were lifted in response to the receding pandemic.

Toyota dealership CFAO Motors Kenya recorded the strongest sales growth among major dealerships in the first quarter ending March.

Its unit sales rose from 608 to 770, representing a jump of 26.6%.

The dealer’s market share then fell from 21.2% to 24%.

CFAO Motors, however, announced that its 2022 full-year sales could fall by some 700 units due to a shortage of semiconductor chips which penalizes the supply of vehicles to customers.

“This [sales] is down because currently we have some challenges everywhere like getting the tokens,” Mr. Arvinder Reel, the company’s Managing Director, told Business Daily earlier.

“At this stage, we cannot meet our request. We have more demand than supply and we hope to be able to catch up with production in the coming months. »

Other dealers, including DT Dobie, had also warned of a potential drop in sales due to the chip crisis which is expected to continue into 2023.

Some automakers have resorted to scrapping high-tech systems like park assist and touchscreens as the shortage mounts.

Semiconductors are used in electronic devices and are essential components of modern cars.

Isuzu, which sells its namesake vehicles, increased sales 3.7% to 1,215 from 1,171.

Its market share, however, fell to 37.9% from 41%.

Simba Corporation’s sales fell to 339 from 410, contributing to its market share drop to 10.6% from 14%.

The dealership sells Mahindra vans, Proton passenger cars, Ashok Leyland trucks and Mitsubishi trucks, as well as sport utility vehicles.

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