Kenya's new car sales jump 18 pct in 2014
16 January 2015, 08:47
Nairobi - The number of new cars sold in Kenya jumped 18 percent last year and is expected to grow further this year, reflecting middle-class demand and growth in sectors such as construction, the industry association said on Wednesday.
The nation's car market is dominated by low-priced second-hand imports from countries such as Japan, but investors monitor new car sales to gauge the health of the economy. New car sales rose to 17,179 in 2014.
The growth of Kenya's middle class is spurring demand for cars, said Rita Kavashe, who chairs the Kenya Vehicle Manufacturers Association and is managing director of General Motors East Africa unit.
"There is demand for services like food distribution so you have a lot of light commercial trucks coming into that sector," she told Reuters.
Commercial vehicles, like light trucks and mini-buses, make up the bulk of Kenya's new car market.
New local authorities that came into existence in 2013 have also been buying, Kavashe said, while a construction boom was boosting demand for heavy-duty trucks.
With the economy expected to grow by more than 6 percent in 2015, she said the industry expected to sell 18,000 to 19,000 new vehicles this year.
With most customers relying on bank funding, the main risk to that outlook was any volatility in commercial lending rates, said Kavashe.
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