NAIROBI, Kenya – Kenya’s car dealerships saw a significant boost in new car sales, recording a 45.2pc increase in the first quarter of 2025 compared to the same period last year.
The surge in sales is largely attributed to an uptick in demand from key sectors such as transport, agriculture, and construction, with dealers noting an improved economic climate and favorable government policies.
According to data from the Kenya Motor Industry Association (KMIA), the 11 major dealers in the country sold 3,298 units in the first quarter, a sharp rise from 2,271 units sold during the same period last year.
This growth comes amidst a broader economic recovery, with sectors like transport, agriculture, and construction driving the demand for new vehicles.
Isuzu East Africa and CFAO Mobility Kenya were the top performers, with Isuzu selling 1,648 units and CFAO moving 959 units.
Trucks led the sales category with 1,349 units sold, followed by 804 pickups and 560 buses, reflecting strong activity in transport, logistics, agriculture, and construction.
Dealers attribute the growth to multiple factors, including improved credit access due to recent interest rate cuts and a stable shilling against the US dollar, which has helped stabilize the market.
Public service vehicles (PSVs) like minibuses and large inter-city buses have been replenishing their fleets under a new leasing program, contributing to the overall increase in sales.
Additionally, the agricultural sector continues to show signs of recovery, with increased trade and last-mile distribution across East Africa fueling demand for vehicles.
The construction industry, which had been struggling in previous years, is also showing positive signs, as some contractors begin to receive overdue payments, boosting confidence and activity in the sector.
CFAO, a merger of former Toyota Kenya and DT Dobie, is optimistic about its performance this year, having increased its market share to 33pc last year.
The company is focusing on expanding its local assembly efforts, particularly after acquiring a 98pc stake in Thika-based Kenya Vehicle Manufacturers (KVM), which it hopes will drive sales and further growth in the coming quarters.
The optimistic outlook for the car sales industry is echoed by the Central Bank of Kenya’s March survey, which revealed sustained confidence in business activity and economic growth prospects.
Factors contributing to this optimism include a stable macroeconomic environment, favorable weather conditions for agriculture, and the continued decline in interest rates, which are expected to ease access to credit and stimulate economic growth.
Dealers are particularly hopeful that further interest rate cuts, like the recent reduction from 13pc to 10pc, will continue to encourage vehicle purchases for major projects across sectors such as manufacturing, transport, and real estate.
A large percentage of these vehicle purchases are financed through asset plans by local banks, which is expected to further support the industry’s growth.
As the economy continues to recover, the outlook for 2025 remains positive, with projected GDP growth of 5.4pc, driven by the resilience of key sectors and improved exports.
However, challenges such as subdued consumer demand and the high cost of doing business remain a concern, as highlighted by the Central Bank’s recent survey.
Overall, Kenya’s car sales industry is riding a wave of recovery, fueled by increased demand from vital economic sectors and the supportive macroeconomic environment.
The strong performance in the first quarter signals a promising year ahead for the industry and the broader economy.
