EFFECTS OF COVID 19 ON IMPORTATION OF MOTOR-VEHICLE

Data obtained from the Kenya Revenue Authority (KRA), indicates that Imports of new and used motor vehicles declined seven percent to 85,624 units in the year ended December compared to 92,120 units in 2019.

A report by Business Daily indicates that the statistics show auto imports fell sharply in the first half of last year when the Covid-19 pandemic hit the country and stern measures were taken to restraint its spread.

The number of units imported between January to June 2020 dropped 30.2 percent to 34,054 compared to 48,839 in a similar period the year before.

Mr. Charles Munyori, the secretary-general of the Kenya Auto Bazaar Association which represents used car dealers stated that, “The first half was tough because the panic and economic disruption reduced demand for vehicles.”  The second-hand models account for about 88 percent of all vehicles imported into the country.

The government implemented several public health measures including a ban on international travel, night-time curfew, the lockdown of counties such as Nairobi, and closure of schools and bars.

Closure of businesses and loss of more than one million jobs were among the unintended consequences of the restrictions which hurt sales of vehicles and other goods.

When the government, started easing most of the restrictions in July 2020, the auto imports recorded a rebound in the second half of the period under review.

Vehicle imports rose 19.1 percent to 51,570 units in the six months ended December compared to 43,281 units a year earlier. This mitigated the sharp contraction seen in the first half of the year, leaving overall 2020 imports down seven percent.

Besides rising consumer and business confidence, the increase in imports late in the year has also been attributed to market forces.

“Prices of vehicles in the international markets declined significantly because of reduced demand. Big dealers took advantage of this and imported more units expecting a recovery in demand,” Mr. Munyori said.

Dealers in second-hand vehicles fared relatively better compared to their formal peers selling new models.

New vehicle dealers including Toyota Kenya, Isuzu East Africa, and Simba Corporation reported a 16 percent sales slump to 11,086 units last year compared to 13,199 units in 2019.

The KRA data shows that Toyota is the most popular vehicle make in Kenya, accounting for 54 percent of all auto imports.

Source; Business Daily.