What are the 2024 trends in the Kenyan automotive market?
Increased uptake of hybrid cars
With the increase in fuel prices and the ever-worsening economic situation, hybrid cars are expected to become a mainstay in the most popular cars in Kenya list as Kenyans adapt to the changing times. There are many reasons to choose a hybrid car in Kenya, legacy automakers have also increased their offerings of hybrid and electric cars making them a compelling offering in the market. The fully electric cars are still difficult to recommend for the Kenyan market and there are measures the Kenyan government must put in place first before we can see an increased adoption of fully electric mobility. Cars like the Toyota Aqua, Honda Fit, Toyota Yaris Cross, Honda Vezel and Lexus NX are expected to see an increased uptake in the Kenyan market.
Reduced vehicle imports
Kenyan citizens have significantly reduced their spending on the importation of motor vehicles, experiencing a nearly 20% decrease due to heightened taxation, a weakened national currency, and shortages of pre-owned units. This trend indicates a potential revenue deficit for the tax authorities.
Recent data highlights that the total value of vehicle imports during the ten months leading up to October reached $680 million (approximately Sh102 billion). In comparison, the same period a year ago saw imports totaling $825 million (Sh123.75 billion). This equates to a notable decline of 17.58%, equivalent to $145 million (Sh21.75 billion), as reported by the Central Bank of Kenya based on statistics gathered by the Kenya Revenue Authority.
The double-digit decline in vehicle imports occurred in response to heightened taxation in the sector, which was implemented following a shortage of second-hand units in international markets earlier in the year.
“The decline in excise duty is attributed to reduced oil volumes, diminished motor vehicle imports, and decreased deliveries of domestically excisable goods such as cosmetics, beer, and spirits,”Treasury Secretary Njuguna Ndung’u.
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Mazda increasing its market share
With everything going on in the Kenyan car scene, one brand stands poised to rack up some sales figures: Mazda. With stunning-looking cars that are feature-packed and all competitively priced, Mazda has endeared itself to the masses and if the recent sales figures are anything to go by, it looks like very soon the car in front will be a Mazda. Here are some of the secrets Mazda is using to reinvent itself and charge ahead in the market. Globally, Mazda is a brand to watch as they’ve reinvented most of their offerings and are very competitive in their respective categories. However, the automaker’s cold feet adoption of electric mobility and the cooling down of the electric car adoption as a whole are trends to watch as the year progresses.
Cars are increasingly becoming better by the day. Improved safety, newer efficient engines, Advanced Driver Assistance Technologies, and electric mobility adoption are all trends that contribute to better cars overall. Cars like the 2024 Volkswagen Touareg, 2025 Subaru Forester, 2023 BMW 3 Series, and the 2024 Toyota Land Cruiser 250 series and 2024 Mercedes Benz E Class all signal the direction of the automotive market. The electric mobility space is seeing interesting and compelling entrants such as the Volvo EX90 and the highly anticipated 2025 Tesla Cybertruck also Debuts. The Volvo EX30 which has the lowest carbon emissions of any vehicle to date is also expected to register increased lases this year.
Kenyans may face difficult times following the festive season as lenders prepare to adjust loan interest rates in January 2024 to reflect the revised Central Bank of Kenya (CBK) base lending rate.
CBK raised its benchmark rate to 8.75 percent during its latest Monetary Policy Committee (MPC) meeting for the second time since May to hedge the economy’s exposure to rising inflation and global risks.
Most commercial banks will seek to pass down the increased cost of borrowing to the consumer, further dampening the market with increased financing costs.
The National Transport and Safety Authority (NTSA) is considering a substantial hike in fees for over 40 services, with proposed increases reaching as high as 3900%. The objective behind these proposed adjustments is to generate extra revenue aimed at addressing the budget shortfall reported by NTSA, which amounts to KSh 2.37 billion in the financial year ending on June 30.
NTSA aims to close this financial gap, taking into account not only the reported deficit but also the additional funds required for crucial road safety programs and the ongoing expenses related to the maintenance of ICT systems and licenses. The cumulative deficit as of June 30 stands at KSh 2.374 billion, as highlighted in a report by the Daily Nation, according to NTSA.
These increased costs are expected to significantly impact the overall cost of vehicles as car dealerships seek to pass down the costs to the consumers.
More expensive cars
Automakers invest billions of dollars into researching better technologies to ensure their cars are intuitive, safe, economical, and fun to drive. The newer technologies are expensive and lead to an overall increase in the cost of car ownership.
The increased hardships experienced in the economy in the wake of increased taxation, weakening shilling, increased cost of borrowing, and the proposed NTSA charges are expected to cumulatively lead to increased cost of vehicles going into the year.
Redefinition of the most popular cars in Kenya
The most popular cars in Kenya are expected to radically change in the coming years to adapt to the changing times. Hybrid cars are expected to increasingly become common on the roads, Mazda cars with their intuitive designs and affordable prices are also expected to see an increased uptake. The K-category cars despite their shortcomings in the safety department are expected to see increased uptake due to their affordability and their practical applications in urban driving situations.
The automotive industry is up for disruptions this year with shortcomings and great opportunities as well.