Kenya’s car market is dominated by low-priced second-hand imports.
Kenyans raised their appetite for low-priced imported cars, with the average unit cost dipping below Ksh1 million ($9,675) in the six months to June.
Official data shows that the country shipped in 41,379 units of vehicles valued at Ksh39.3 billion ($380m) in the first half of 2017, translating to an average of Ksh949,757 ($9,189) per unit.
This is 18 per cent higher than the 34,989 units that the country imported in a similar period last year at a higher cost of Ksh40.9 billion ($395m), data from the Kenya National Bureau of Statistics (KNBS) shows.
This puts the average of last year’s car import bill at Ksh1.16 million ($11,224), which is Ksh210,000 ($2,031) more expensive than this year’s average.
Dealers say increased demand for low-cost vehicles for taxi-hailing apps such as Uber has pulled down the average unit cost.
“More people are going for small budget cars like Toyota Belta,” said Charles Munyori, the secretary-general of the Kenya Auto Bazaar Association, a lobby group for second-hand car dealers.
“Increased use of services like Uber definitely has a hand in this as young people buy units they can afford for business,” he added.
Taxi services
Taxi hailing firm Uber said last week that it has 363,000 active users in Kenya, making it the second biggest market after South Africa, which has 969,000 active riders.
The data released on Thursday also shows that 5,000 and 12,000 Uber drivers are signed up in Kenya and South Africa, respectively.
Besides Uber, other firms are Taxify, Little, ShareCab and Mondo Ride, underlining Kenya has a huge market for the taxi-hailing apps.
Kenya’s car market is dominated by low-priced second-hand imports from countries such as Japan.
The KNBS data shows that in the full year of 2016 Kenyans cut spending on imported vehicles by Ksh31.7 billion ($306m) to Ksh85.5 billion ($827m) from Ksh117.6 billion ($1.1b) in 2015, reflecting a 27 per cent drop.
Motor dealers attributed the cutback to reduced demand due to tax measures introduced in December 2015.