This archive report was first published on 22 October 2019.
Published on October 22, 2019, data from the Kenya Motor Industry Association revealed a significant drop in luxury car sales, with unit sales of high-end brands falling to 112 in the nine months to September, compared to 198 the previous year.
The decline 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 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 anonymity.
The Kenya Revenue Authority has been targeting individuals who drive high-end vehicles but have little to show in terms of taxes remitted, using car registration details to identify them.
Additionally, stockouts of several luxury car models have been reported, following global manufacturers’ production decisions and changes in the ownership of local franchises.
BMW sales suffered after the German car franchise was transferred from Simba Corporation to rival Inchcape Kenya, while Land Rover sales dropped by half to 34 units, ceding its lead in the luxury car market to Mercedes.
