Cost of imported cars drop below Sh1 million for the first time in more than 5 years

According to the Kenya National Bureau of Statistics (KNBS) official data released on Friday, Kenya shipped in 20,324 units at a cost of Sh19 billion ($190 million) between January-March, translating to an average of Sh934, 855 per car.
Car prices ordinarily tend to be costly in the first quarter of the year as dealers have a longer period to sell them in an economy that bars the import of vehicles older than eight years.
Increased demand for smaller cars in Kenya is mainly driven by operators of taxi hailing firms like Uber and Bolt (previously Taxify) who are looking for fuel efficient cars.

In the first quarter of 2019, the average cost of imported cars in Kenya dropped below Sh1 million ($10,000) for the first time in more than five years, indicating a shift by buyers towards budget vehicles.

According to the Kenya National Bureau of Statistics (KNBS) official data released on Friday, Kenya shipped in 20,324 units at a cost of Sh19 billion ($190 million) between January-March, translating to an average of Sh934, 855 per car.

Compared to a similar period last year, Kenya imported 19,433 vehicles, which was 4.5 percent fewer but at a steeper cost of Sh20.4 billion or an average of Sh1.04 million a car.

A car carrier discharging imported motor vehicles at the Port of Mombasa. Pulse Live Kenya

Car prices ordinarily tend to be costly in the first quarter of the year as dealers have a longer period to sell them in an economy that bars the import of vehicles older than eight years.

The 2017 quarter one car import bill translates to an average of Sh1.07 million per unit with the mean cost coming at Sh1.04 million in the first three months of 2016.

Increased demand for smaller cars in Kenya is mainly driven by operators of taxi hailing firms like Uber and Bolt (previously Taxify) who are looking for fuel efficient cars.

Cars awaiting clearance outside one of the sheds at Mombasa port. Pulse Live Kenya

Charles Munyori, the secretary-general of Kenya Auto Bazaar Association, a lobby group for second-hand car dealers said more and more Kenyans are now going after small cars.

“More people are going for small budget cars,” said Munyori.

Reduced lending by financial institutions’ has, however, put a brake on the number of Kenyans who can buy cars since most buyers rely on loans to acquire vehicles.