Car importers counting losses as their businesses record a significant drop in 3 months thanks to RUTO and the high fuel prices

 

Thursday, January 25, 2024 - Car imports between July and September 2023 recorded a massive drop, an indication of the tough times that Kenyans faced.

According to the International Trade Report released by Kenya National Bureau of Statistics (KNBS), units imported in the third quarter of 2023 dropped by 65 percent in comparison with units brought into the country between April to June of the same year.

According to the report, 64,359 units were imported into the country between April to June.

However, in the succeeding months, only 22,271 units were brought into the country, a clear indication of a decreased demand.

Notably, between January - March 2023, Kenyans imported 63,990 vehicles.

Kenya mainly imports second-hand vehicles from Japan. The United Kingdom and Thailand are also some of the key markets for Kenyan importers.

The decrease witnessed in 2023 Q3 resulted from the weakening of the shilling and the increase in fuel prices.

In the 2023 Q3, the dollar exchange rate was between Ksh140 to Ksh148. Owing to the depreciation of the shilling, importation became more expensive, making Kenyans prioritize other expenditures.

On the other hand, the cost of maintaining cars also became expensive owing to the pump hike witnessed in the 2023 Q3. This was the period when the 16 percent VAT on fuel also came into effect.

Between July and August 2023, petrol retailed at Ksh194.68, diesel at Ksh179.67, and kerosene at Ksh169.48. Between August to September, the prices remained unchanged.

However, during the September review, the Energy and Petroleum Regulatory Authority (EPRA) increased the price of petrol by Ksh16.96 per litre while diesel has increased by Ksh21.32 per litre.

EPRA attributed the sharp increase in importation cost and the exchange rate given that fuel products are imported in dollars.

The Kenyan DAILY POST.