BUSINESS ECONOMY

Why Used Car Prices Are Up 29% in Kenya

MARTIN SIELEApr 28, 20212.3k

In source markets such as Japan, more people are holding on to their cars during the pandemic reducing the supply of used cars to markets such as Kenya.

Kenyans are having to pay between Ksh100,000 to Ksh500,000 more for popular imported used car models in recent months, with prices up 29pc.

Among several other factors, reduced supply from the main source market for used cars in Kenya – Japan, has been the main issue. Analysts opine that the economic fallout from the Covid-19 pandemic has seen people hold on to their cars for longer as opposed to paying top dollar for new cars in a recession.

Prices in destination markets such as Kenya, therefore, went up on the back of lower supply. Some of the popular used car models whose prices have noticeably risen include Toyota Rav 4, Toyota Vanguard, Mazda Demio, Toyota Fielder and Nissan X-Trail.

Another factor that has played into the situation is the disruption of global supply chains since the onset of the pandemic. It has gotten more expensive to ship certain goods, and there has been a shortage of ships and containers.

Port congestion and a surge in international-container shipping rates has been reported in Japan, with companies who are reliant on global maritime transport heavily affected.

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Spot prices for shipments to Southeast Asia, South America and South Africa rose three- to sixfold to the highest levels in data going back to 2009.

Cars at the Port of Mombasa. Global supply chains have been severely impacted by the pandemic, with international shipping container rates soaring alongside port congestion.

Shipping companies are working on an international framework for sharing empty containers, a move that stakeholders hope will boost trade flows and global economic recovery in the post Covid-19 era.

Prices of used cars have also been inflated in Kenya as most of the current stocks of used cars were shipped in when the Shilling had depreciated 7.8 per cent against the US dollar.

A 2013 Nissan X-Trail will set you back Sh2.2 million, up from Sh1.7 million in January

A Toyota Premio (2014) is going for Ksh1.9 million up from Ksh1.6 million in January while a Toyota Vanguard (2013) model will cost you Ksh2.8 million, from Sh2.4 million in January,

A 2013 Mazda Demio is being priced at Ksh750,000 up from Sh650,000 in January.

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Written by

MARTIN SIELE -

Martin K.N Siele is the Content Lead at Business Today. He is also a Quartz contributor and a 2021 Baraza Media Lab-Fringe Graph Data Storytelling Fellow. Passionate about digital media, sports and entertainment, Siele also founded Loud.co.ke