Kenya Automobile Market Analysis and Forecast is our detail model level report. Kenya is the largest Auto market in East Africa region. The GDP growth of the country was 5.9 percent in 2016 and expected to rise 6 percent in 2017. Key drivers of the growth are services sector performance, Construction activities, the Stable exchange rate of the currency, maintain low inflation, low fuel prices, a growing middle-class and its incomes, Govt investment in energy and transportation sector.
Markets in Africa region are generally faced with a high volume of refurbished vehicles which are considered low priced than new vehicles. New vehicles in Africa are predominantly imported as knocked-down kits and assembled in local facilities, whereas used vehicles are imported as fully built units.
In 2016, 110,000 cars were imported, marking an increase of 50% compared to 2015 in East Africa region. High-interest rate, Difficult to finance the vehicle, the high cost of electricity and Good quality of refurbished are few of the major challenges to sale in a new vehicle. It is expected that that total vehicle sales in East Africa will increase by 30 to 40 percent by 2022. Domestic vehicle sales drop by around 30% in 2016.We have exclusively sales data of some OEMs which do not share their sales data with local authorities.
Around 7 to 9 percent growth is expected in 2017 due to some favorable market dynamics for both Commercial and Passenger vehicles segment like financial, currency, Vehicle price, Govt policies etc.
In Vehicle type, Sedan and C segment is the most popular in Kenya. Pick up is the largest segment in Passenger Vehicle. SUV/MUV is the second largest segment.
Mitsubishi and Isuzu are top players in the Truck segment. Chinese players like SinoTruck are also increasing their market share year on year. There is the significant price gap between Chinese and European and Japanese vehicles. Chinese new vehicle competes with used or refurbished European products.
Kenya became production and assembly hub for East African countries included major Indian and Chinese OEMs. Leading players like Toyota, Nissan and Mitsubishi already have plants in Kenya, mainly producing commercial vehicles rather than cars. Total production stands at about 10,000 units a year, according to the Kenya Vehicle Manufacturers Association (KVMA).
Vehicle price plays important role in Kenya market, Asian players are targeting this segment by offering low budget vehicles. SinoTruk and Tata Motors are leading OEMs in Truck segment. These brands are positioned as reasonable and value-for-money products.
Volkswagen is having JV with Kenya Govt. VW plant is expected to start by end of 2017.The government has a 35 per cent stake in this JV. A number of companies with the assembly operation in Kenya – including Japan’s Toyota and General Motors – are also looking into applying for the incentives introduced by Govt. Volkswagen, Cherry, Renault, Toyota considered the country’s strategic position as a gateway to the East and Central African regions.
Under the new duty structure, Govt is promoting locally manufacture practice. CKD kits are waived from the 25% import duty and 20% excise levy that applicable on fully built imports vehicles. Under this tax system Excise Duty Act of 2015 local assemble vehicle will be available at competitive price. Govt imposed some additional tax on new vehicles and more than 3-year-old vehicle in 2016 which had a negative impact on Auto Industry. After pressure from many Industry stake holders of Auto Industry, this additional tax was removed. Due to additional tax, prices of pick-ups, buses and trucks increased by between Sh231,000 and Sh1.2 million.
Key Highlights of the report:
- Market Overview and Latest development
- Product pricing Analysis of New used and Refurbished vehicle
- Truck, Bus and Passenger Vehicle Included in report
- Trend and Forecast 2023
- Brand Position
- Customer behaviour
- Customer Segments
- Vehicle Uses/Application
- Sub Segment Analysis
- Macro Economy Analysis and Forecast
- Product Position of Indian, Chinese, European, Japanese and American brands
The report is available for Premium Subscriber also, If you are not the premium subscriber please contact to nidhi.singh@autobei.com
