Sales on Second-Hand Cars start rising as Buyers access Mombasa

In Summary 

• According to car importers, the ban on movement has hindered prospective car buyers from traveling to Mombasa, the port city. The same applies to imported units.
• Covid-19 has significantly affected the economy and has led to a drop in car sales by 25.9% between January and June this year.

Car dealers say that the sale of second-hand cars has started to grow in the last two weeks as buyers are now able to travel and visit showrooms in Mombasa after President Uhuru Kenyatta lifted the ban on movement. The ban on movement in and out of Mandera countries, Nairobi, and Mombasa was in place for approximately three months and lapsed on July 6. After the ban was imposed, potential car buyers were locked out from travelling to Mombasa.

There are more than 400 showrooms in Mombasa showcasing second-hand cars that arrive at the port. Kenya has a monthly import of approximately 12,000 units before Covid-19 disrupted importation.

The Car Importers Association of Kenya (CIAK) stated that car sales are currently at 25% and is rising. According to CIAK, second-hand car demand is still stable despite reduced household spending power.

The CIAK chairman, Peter Otieno, stated that the industry has lost up to 95% of sales business as most customers were unable to travel to Mombasa as most of them come from areas outside Mombasa.

Similarly, data from the Kenya Motor Industry Association (KMIA) shows the decline in the number of new vehicles sold between January and June. The KMIA data shows that 4570 units of new cars were sold between January and June 2020 compared to 6175 units sold during the same period in 2019.

Major brands, including Mitsubishi, Toyota, Ford, and Isuzu, encountered difficulties moving new units into the Kenyan market.

Toyota Kenya sales declined by 39% within four months (March to June) compared to sales in the same period in 2019.

Arvinder Reel, Toyota Kenya Managing Director, stated that there are some positives in June as the company sales rose by 48% compared to sales made in the previous month. The company is optimistic that the trend will continue as guidelines are put in place by the government to help re-open the economy.

85% of Kenya’s motor vehicle market is dominated by second-hand cars due to the high price of new cars. Buyers spend approximately 60 billion shillings on imported second-hand cars with prices ranging from as low as sh 500000 and an average of 2.5 million.

As stated by CIAK, the current monthly imports of used cars range between 4000 and 7000 units.

During the ban on movement, importers used SGR and load carries to transports units sold through direct orders. However, cars to be sold in showrooms had to remain in Mombasa.

Otieno stated that the company imported cars, but most units were not transported out of Mombasa. The high cost of carriers reduced the number of car sales. However, business is picking after the movement cessation was lifted.

Kenya imports approximately 130000 units of second-hand vehicles every year from different countries, including Singapore, UK, UAE, Japan, and South Africa.

To import second-hand cars from the UK, visit our website https://www.cars4export.co.uk/ for more information.