This archive report was first published on 18 October 2019.
Published on October 18, 2019, wealthy Kenyans have cut orders for luxury cars like Porsche, Range Rover, and Jaguar by 43% in the nine months to September, leading to a sharp decline in new vehicle sales.
According to data from the Kenya Motor Industry (KMI) Association, unit sales of high-end brands fell to 112 in the review period compared to 198 the year before.
The slump was much deeper than the 6.5% sales drop in the overall new vehicle market, which sold 10,081 units in the same period.
Car dealers have attributed the reduced demand for luxury cars to a mix of factors, including franchise and supply chain disruptions, as well as increased government scrutiny of luxury spending and large financial transactions.
“Tax authorities are interested in people buying luxury cars. The option of paying for cars using cash is also now closed,” said a dealer who requested not to be named.
Car registration details are being used to smoke out individuals who are driving high-end vehicles like BMW, Mercedes, Porsche, and Land Rover, but have little to show in terms of taxes remitted.
The Kenya Revenue Authority (KRA) has set out to raise more revenues from individuals whose lifestyles suggest they have higher incomes than what their tax payments indicate.
