Jaguar, Mercedes demand drives up luxury car sales

Sales of new luxury cars rose 3.8 percent in the half year ended June, helped by increased demand for Jaguar and Mercedes-Benz models.

Kenya Motor Vehicle Industry Association (KMI) data shows that formal dealers including DT Dobie and Inchcape Kenya moved 82 units in the review period compared to 79 units a year earlier.

Luxury car sales, however, significantly underperformed the overall new vehicle market that recorded a sales boom on increased demand for commercial vehicles.

Overall new vehicle unit sales surged 35 percent in the same period to 6,246, recovering from the shocks of the Covid-19 pandemic.

The divergence indicates that investment spending is growing faster than consumption of luxury goods.

Commercial vehicles like pick-ups, buses and trucks are mostly bought by government departments and businesses undertaking various economic activities such as transport, security, construction and trade.

Luxury cars, whose price can top the Sh30 million mark, are bought by wealthy households, private companies (for directors) and government departments like the judiciary (for judges).

DT Dobie sold 38 Mercedes-Benz cars in the review period, up from 37 the year before and retained its top position in the luxury segment.

Inchcape was second, selling 18 Land Rover models, 14 BMWs and two Jaguars in the period compared to 18, 14 and zero respectively a year earlier.

Bentley Nairobi sold one unit of its namesake cars, same as the prior period.

Sales of Porsche cars, by Porsche Centre Nairobi, also remained flat at nine units.

The dealer is clearing its stocks of the high-performance German cars after its contract was terminated by the manufacturer.

The company lost the franchise in January and was allowed to continue offering parts and service as a replacement is being sought.

The manufacturer, Stuttgart-based Porsche AG, is yet to announce its new partner in Kenya.

Franchise transfers have the effect of hurting a brand’s sales as the old partner stops importation and the new dealer takes time to set up operations.

A few dealers, including Simba Corporation, have been in the race to take up the Porsche dealership in Kenya.

Simba, which lost the BMW franchise to Inchcape Kenya, has been absent in the high-end car market since January 2019.

Delays in appointing a new Porsche dealer for the local market comes as the car’s sales have weakened in recent years.

Porsche Centre Nairobi was well received when it opened in May 2014, with sales rallying to 125 units within the first eight months.

Orders for the models, led by the popular sports utility vehicle (SUV) Cayenne, stood at 102 units in 2015 and dropped to 54 units the next year as the slump continued. The dealer’s sales had declined to 25 units last year.