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Have you been to the automobile market lately? Did you notice something strange or similar in the different markets?
It is actually one thing that you will be noticing in almost all of the automobile market, is the ruling of Japanese auto brands. Whether you are in the used cars market or the new cars market, it is Japanese brands everywhere. Similarly, Kenya’s automobile market is influenced by Japanese cars in the same manner. How this whole impact puts pressure on the customer or they get relief in terms of the high prices, is the topic of this article.
When there is one leading brand in the market and you get to see the same name everywhere, there is a high chance that the other brands are leaning down in some way. That is what Japanese automobile brands have done with the Kenya auto market like the rest of the world.
With 94.3% of the 62,495 used cars delivered in the 12 months before June of last year, Japan has become the clear front-runner in the used car export market to Kenya. This dominance demonstrates Japan’s strategic position as a key exporter in the global automotive trade in addition to reflecting Kenyan consumers’ preference for Japanese automobiles.
The significant portion of the market of Japanese cars for sales shows their firm position in Kenya’s auto industry. With a wide variety of models to suit different needs and tastes, brands including Toyota, Honda, Isuzu, Subaru, Mitsubishi, Mazda, and Nissan have continuously drawn in customers.
Which Japanese Auto Brands are Popular in Kenya?
The importing of used cars is not the only way that Japanese auto brands are present even dominating in Kenya. These companies have built a strong network of regional franchise owners that offer warranties, authentic parts, and dependable services to clients. This extensive network of support services significantly improves the value of owning Japanese used cars in Kenya, increasing its appeal and competitiveness in the market. Japanese automakers are also well-known for their high standards of quality, dependability, and technological innovation, accounts that Kenyan consumers find particularly appealing. The popularity and market acceptability of manufacturers like Toyota has been greatly influenced by their reputation, which is built on their dependability and cheap maintenance costs.
Among the Japanese automakers, a few models have become Kenyan buyers’ go-to choices throughout time. As the most popular brand, Toyota offers a wide range of models that cater to different market niches. Some of these vehicles include the Probox, Corolla, Land Cruiser, Hiace, and Vitz.
On the other hand, the demand for the Probox has increased because it is a versatile vehicle that can be used for both personal and commercial purposes. Its large cabin, economical fuel use, and sturdy design make it a great option for homes, small enterprises, and ride-hailing services, all of which have a big part in its market success. The people in Kenya mostly prefer hybrid or more flexible options that can adjust to their personal or commercial needs.
Impact of Commercial Use and Taxi-Hailing Businesses
Small-capacity automobiles and light commercial vehicles are in high demand due to the growth of e-commerce delivery platforms and taxi-hailing services. Japanese automakers are now the go-to option for delivery drivers and ride-hailers due to their reputation for dependability, economy, and price.
In the taxi-hailing market, vehicles like the Honda Fit and Toyota Corolla, which are renowned for their small size, economical fuel use, and agile handling, have become more popular. In a similar vein, Isuzu trucks and pickups serve commercial customers’ logistics and transportation demands, reinforcing Japanese brands’ dominance in the commercial vehicle market.
What are the Global Problems and how do Supply Chain Disturbed?
The automobile industry has had difficulties as a result of global disruptions, notwithstanding the tenacity of Japanese automakers in Kenya. Specifically, the COVID-19 outbreak disrupted supply lines, delaying the production and transportation of automobiles.
Temporary closures of ports and production facilities in Japan affected the supply of automobiles in the Kenyan market. Furthermore, a worldwide scarcity of semiconductor chips, which are essential parts of contemporary automobiles, exacerbated supply chain difficulties by impacting manufacturing levels and delivery schedules.
Is there any change in exchange rates or import duty?
Changes in import tariffs and currency fluctuations can have a direct impact on the price of cars in Kenya’s automotive industry. Consumers and industry stakeholders are facing difficulties as a result of the depreciation of the Kenyan shilling relative to major currencies such as the US dollar, euro, and British pound.
In addition, the previous Finance Act’s tax revisions and other regulatory reforms have increased import taxes, which has increased the overall cost burden. The price of vehicles is affected significantly by the increase in import tariff from 25% to 35%, which affects customer affordability and purchase decisions.
How fast market is shifting?
The Kenyan automobile market’s dynamics are significantly shaped by the regulatory framework. Vehicle costs, market competitiveness, and customer behaviour are all directly impacted by changes in trade regulations, import levies, and taxation. Imported cars now cost more due to the latest tax changes in the 2023 Finance Act, which included raising import duty to 35%. This has led to changes in consumer preferences toward more economical and cost-effective vehicles and a reevaluation of pricing strategies by automakers and dealerships.
Furthermore, stricter legislative frameworks about safety requirements, emissions from vehicles, and the environment are affecting the market’s availability and acceptance of specific car types.
Wrapping it up
There are many different aspects of Japanese automobile brands’ impact on Kenya’s automotive market, including market segmentation, product diversity, regulatory dynamics, and brand reputation. Anyhow their strong consumer trust and industry domination, Japanese companies must contend with obstacles like currency fluctuations, regulatory changes, and global upheavals.
A strategic approach is necessary for industry stakeholders, including manufacturers, dealerships, politicians, and consumers, to effectively navigate these obstacles. Sustaining growth and competitiveness in Kenya’s automotive sector requires cooperative efforts to improve supply chain resilience, implement sustainable practices, foster technical innovation, and address affordability concerns. Japanese automakers are well-positioned to drive innovation, set industry trends, and cater to the wide range of needs of Kenyan consumers as the automotive landscape continues to change.