Motorcycle sales decline sharply amid taxes, soaring fuel prices
Boda boda riders waiting to pick passengers on the streets of Nairobi.
What you need to know:
- New purchases of motorcycles had been consistently rising yearly since 2008.
- The first sharp decline came in 2022, when new registrations more than halved.
The number of new motorcycle purchases has slumped to the lowest level since 2008, as high taxes and skyrocketing fuel prices cut demand for the two-wheelers for private and business use.
Fresh data from the Kenya National Bureau of Statistics (KNBS) reveals that new motorcycles registered last year dropped by 52.6 per cent to 62,338, down from 113,513 in 2022.
This follows a rise in several levies last year, including value-added tax on petroleum products that put fuel out of reach of some transporters among them boda boda riders who found the business increasingly less profitable.
New purchases of motorcycles, which are a common means of transport in Kenya, had been consistently rising yearly since the government waived import taxes on them in 2008.
The first sharp decline was recorded in 2022, when new registrations more than halved from 285,203 in 2021.
This was around the same time when Kenya’s fuel prices started taking an upward trajectory following onset of the war in Ukraine, which disrupted global oil supply and sparked inflationary pressures locally.
Last year, the government’s move to raise value-added tax on petroleum products also dampened demand, with fuel uptake dropping to a five-year low in the six months to December last year, pointing to reduced use of road transport. In the same period, there was a decline in passenger car purchases.
Newly registered saloon cars fell 13.5 percent while station wagons dropped by two percent and vans declined by 18.2 percent.
However, there was a surge in newly registered commercial vehicles, pointing to the growing use of mass public transport as the high costs of living and fuel prices bit last year.
