NAIROBI, Kenya, Jan 27 – The sale of new luxury vehicles in Kenya plunged deeper into recession in 2019, with sales dropping more than 47.9 percent, compared to orders in the overall new vehicle market.
According to the Kenya Motor Industry Association, unit sales of luxury brands such as Land Rover and Mercedes feel to 142, compared to 273 posted the previous year.
The decline has been attributed to various factors among them franchise and supply chain disruptions in the industry.
In December 2019, the Association projected a drop of at least 8.5 percent compared to 2018, having sold 12,030 units only in the 11 months to November.
The best performance recorded in recent years was in 2015 when they moved 19,451 units.
Globally, the global auto industry also noted a decline, with sales dropping more than 4 percent.
According to LMC Automotive, the number of vehicles sold across major global markets dipped to 90.3 million last year, down from 94.4 million in 2018, and well below the record 95.2 million cars sold in 2017.
“The slump has upended an industry that is grappling with the huge challenge of ditching the internal combustion engine to tackle the climate crisis. Some experts have even begun to speculate that the world may have reached “peak car,” or the point at which global demand for vehicles begins an inexorable decline,” reports CNN.
Recession comes with big ramifications for the global economy.
According to the International Monetary Fund, the car industry accounts for 5.7 percent of economic output and 8 percent of goods exports.
It is the second largest consumer of steel and aluminum.
Data by CNN shows that the biggest blow to carmakers last year came in China, the world’s largest market for vehicles, where a sharp slowdown in economic growth and the elimination of tax incentives for electric car purchases caused demand to plummet.
The number of vehicles sold dropped 2.3 million from 2018.