Auto manufacturers in Kenya are battling to boost sales in the East African market as domestic demand for new vehicles continues to decline.

Industry data shows that Kenyan auto assemblers sold just 280 units in August this year in the export market, with Toyota accounting for 146 units, and General Motors East Africa (GMEA) 73 units.

Sales plummeted by 30.2 per cent in the first six months of 2016. This downward spiral in the sales of new cars is projected to persist until the end of the year.

Manufacturers sold 9,211 units in August, compared with 13,321 in the same period last year.

Industry players attribute the decline to high interest rates that had skyrocketed to a high of 24 per cent before the Central Bank of Kenya capped them at 14.5 per cent.

Most buyers of new vehicles, particularly trucks and buses, depend on asset financing facilities from commercial banks.

A rise in taxes, including the introduction of VAT on the industry in 2013 and imposing of a Ksh150,000 ($1,481) flat rate excise duty for locally assembled cars also hit the industry hard.

In the 2016/17 Finance Bill, the government had proposed to increase the excise duty for locally assembled vehicles to 20 per cent but made a hasty retreat following protests by the industry.

This year, imports continue to dominate the market, accounting for a 54.9 per cent share while vehicles assembled locally control a 45.1 per cent market share.