Kenya becomes largest importer of used cars from Japan

Kenya has toppled Russia and Chile to become the world’s fourth largest used car importer from Japan in the midst of a global slump in the auto industry.

In Africa, Kenya is the largest destination of used car exports from Japan. In April, South Africa was overtaken by Kenya after Africa’s biggest economy experienced a decline of 34 per cent in used car imports.

This is happening as Japanese car makers struggle to deal with low car shipments abroad with latest statistics showing a 64 per cent drop in May compared to April.

Drop in imports

The decline was due to importers like UAE, Bangladesh and New Zealand recording a drop in demand of up to 45 per cent compared to last year.

Overall, local used vehicle importers say that demand for used cars has dropped over the last three months as most households review their spending priorities.

Mr Kennedy Macharia, a car dealer with Tymstar Motors, said that although demand has dropped they are still importing cars.

Although there is still a big market for used cars in the country, high competition from local used car dealers has led to over-saturation in the market.

Mr Samuel Wanjama, the sales manager of Uhuru Highway Motors, said that flexibility in the industry had led to heightened competition and oversupply.

Individual sellers

Besides dealers, there are individuals who import cars and sell at lower prices because they don’t pay dealer fees. The increased competition in the used car dealer industry has spurred them to come up with better service warranties for their customers.

For example, Tymstar Motors offer a one-year free service tune up for all new Honda and Lexus cars bought from them as a way to maintain a segment of the market. This type of service is not normally available when people buy their cars from individuals.