This archive report was first published on 19 October 2019.
Published on October 19, 2019, data from the Kenya Motor Industry Association shows that unit sales of high-end brands fell to 112 in the nine months to September, compared to 198 the year before.
The slump in luxury car sales was more pronounced than the 6.5% sales drop in the overall new vehicle market, which sold 10,081 units in the same period.
Car dealers attribute the reduced demand for high-end 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 anonymity.
The Kenya Revenue Authority has set out to raise more revenues from individuals whose lifestyles suggest they have higher incomes than what their tax payments indicate.
Stockouts of several luxury car models have also contributed to the decline in sales, including Porsches and Bentleys, which were out of stock for four months until May.
BMW sales suffered after the German car franchise was transferred from Simba Corporation to rival Inchcape Kenya early this year, while Land Rover sales dropped by half to 34 units.
Mercedes unit sales dropped marginally to 38 units from 42, but the company could get a major sales boost later this year due to a planned purchase of 121 Mercedes cars by the Judiciary.
