Sale of New High-end Cars Declined by 50% in 6 Months

By Carlos Onyango / July 22, 2019

High-end car dealers are facing a major drawback as the sales of cars have dropped by 50 percent in half a year.

Kenya Motor Industry Association (KMI) revealed data that shows luxurious car brands like Land Rover, Mercedes and BMW have dropped in sales unit from 137 the previous year to 69 this year.

This is a huge drop as compared to the overall sales of new cars in the market which has dropped just by 2.5 percent in the same period.

Ownership changes of the franchises and decrease in stocks of several car models have been linked to these drops.

The 2019 models of Porsche and Bentley, for instance, had source delays that attributed to stockouts for a period of four months.

Porsche’s unit sales dropped from 30 a year to 10 during the review period. Bentley units’ sales are still stagnating at three units a year.

The new model of Porsche (Cayenne) which is also the fastest-selling model, is priced at 12 million shillings with taxes included.

The parent company of Porsche and Bentley is logistics firm Multiple Group, but the two brands are sold by separate dealers.

For the German car Franchise BMW, dealership changes where Simba Corporation transferred to Inchape Kenya prompted the sales to drop drastically from eleven to three.

With the recent publication by the judiciary, that it plans to buy 121 Mercedes cars for judges and other staff, DT Dobie would at least get a serious sales to boost.

Increased crackdown on tax evaders and importation of cheap cars have also been a serious contributor to drop-in car sales.

Lending rate caps was another causative factor as most individuals could not get loans to purchase motor vehicles. Analysts argued the rates cap introduced in September 2016, discouraged lenders to give credits in deliberate efforts to avoid credit risks.