Data from the Kenya Motor Industry Association (KMIA) showed companies including Isuzu East Africa, CFO Mobility Kenya and Simba Corp recorded a 12.27 per cent decline in purchases to 4,982 units in the six months ended June from 5,679 units a year earlier.
Applications fell by a similar margin in the same period last year, falling by 12.52 percent from 6,492 in the first half of 2021.
The double-digit decline in two years in a row has pushed orders to their lowest levels since the year of the Covid-19 pandemic, when sales fell by a quarter (25.48%) to 4,628 units from 6,210 units in the January-June 2019 period.
Traders have complained this year about rising interest rates, which have dampened demand, as most purchases are financed by banks, while a backlog of outstanding bills that have not yet been settled by the government and private companies has eroded their cash flow positions.
“Interest rates were high, which meant most of our clients couldn’t get financing,” Rita Kafashi, managing director of Isuzu East Africa, said in an interview in March.
“We haven’t seen this kind of interest rate in many years, so it’s tough on our customers as well.”
The high cost of borrowing, which exceeded 26 percent, added to the previous challenges of high exchange rates and difficulty accessing dollars that traders faced in 2022 and last year, affecting the import of vehicles and spare parts.
The Kenyan shilling hit a record low of 161 shillings to the US dollar in January, according to official rates published by the Central Bank of Kenya, before recovering from mid-February to trade at prevailing rates of around 130 to the US dollar.
The shilling averaged 140.27 units against the dollar in the first half of the year, 6.54 percent weaker than the average of 131.66 units in the same period in 2023.
KMIA data shows that CFAO posted the biggest decline among the three traders.
The company, which sells several brands such as Toyota and Mercedes, reported a 14.48 percent year-on-year drop in sales to 1,630 units in the six-month period.
Market leader Isuzu said orders fell 5.95 percent to 2,354 units, while Simba’s sales fell 10.15 percent to 522 vehicles.
Isuzu, which sells pickup trucks, buses, trucks and SUVs, increased its market share to 47.25 percent from 44.07 percent, while CFA fell to 32.72 percent from 33.56 percent.
Simba Corp’s stake remained largely unchanged, rising slightly to 10.48 percent from 10.23 percent.