First-time car buyers are opting for older models manufactured between 2011 and 2012 as COVID-19 pandemic dents income, an index by Trends and Insights For Africa (TIFA) and Cheki Kenya shows.
According to the Kenya Used Vehicle Index Report, of the listed vehicles online marketplaces, cars manufactured in 2012 accounted for 43% of all listings followed by those manufactured in 2013 at 27% and 2011 at 6%.
Toyota dominates the listing accounting for 43.7%, Nissan 11.5%, and Subaru 7.3% while Mitsubishi, Mercedes-Benz Volkswagen close top 6 most sold second-hand vehicles with 6.5%, 5.4%, and 5.3% respectively.
“Used car imports in Kenya have been on a steady rise since the rise of infections in the country from early this year as many individuals opt for private means of travel in a bid to reduce the chances of being infected with the COVID 19 virus,” said Resian Leteipan, Cheki Kenya CEO.
Imported second-hand vehicles account for 85 percent of Kenyan car purchases.
The new index by the TIFA and Cheki Kenya is expected to help buyers compare prices and price trends for different months, quarters, or years, enabling them to calculate the rate of inflation in the car market.
“The KUV Price Index growth sustained a downward trend from an index of 102.81 in February compared to an index of 67.87 in March based on a fixed base Index. This decline is attributed to the adverse effects of COVID-19. The price index increased in August to 149.25. I foresee this index being used by car dealers, car buyers, financial and economic analysts as an indicator of pricing trends in the used vehicle market,” said Maggie Ireri, TIFA chief executive.
The index further shows that dealers in used cars reduced prices between February and March in response to a grim demand in an economy reeling from the effects of the COVID-19 pandemic which was majorly caused by the loss of incomes and inability of many households being unable to service bank loans.
“Sale of cars seized by banks could have potentially increased supply in the market, further putting downward pressure on prices,” added Leteipan.
The data analyzed also showed large declines were recorded for pick-ups, 4-wheel drives and SUVs, saloons, hatchbacks, buses, vans, and mini vehicles. The prices increased between April and May 2020, with the station wagons, coupes, and 4-wheel-drives/SUVs registering the highest variation.