Stronger shilling drives down used vehicle prices
Second hand cars being offloaded from a cargo ship at the Port of Mombasa.
Prices of some popular brands of imported second-hand cars have dropped by double-digits between January and this month, driven by the shilling’s rally against the dollar.
Dealers said prices have been easing since the start of the year, offering relief to price-sensitive Kenyans who opt for the used units.
The official exchange rate from the Central Bank of Kenya shows that the shilling exchanged at 128.67 units against the greenback compared to 160.8 units as of January.
A 2017 Landcruiser Prado TX for instance is now going for Sh4.5 million compared to Sh5.3 million at the start of the year, or a 17.7 per cent drop, while a used 2017 Subaru Outback is now retailing at Sh2.5 million, down from Sh3 million in January-a 16.6 per cent drop.
Prices skyrocketed
The price drops offer relief to Kenyans who had been forced to shelve purchases of second-hand cars last year when prices skyrocketed amid the shilling’s woes against the dollar.
“Prices have gone down because of the shilling’s recovery against the dollar,” Cindy Ndeda, marketing manager at the Kenyan office of SBT Japan said.
“We have seen price drops as a result of how the shilling has gained against the dollar,” Kenya Auto Bazaar Association secretary-general Charles Munyori.
The dollar is the currency used in Kenya to pay for imported goods including motor vehicles, fuel, and furniture and a strengthening of the local unit has the impact of lowering the cost of the imports.
An official at Vozilo Motors, another car dealer in the city said that prices of the units had dropped, singling out a Nissan Note which is now going for Sh850,000, down from Sh1 million at the close of the year.
Sh3 million
A Mercedes Benz C200 is going for Sh3 million compared to Sh3.5 million while a Nissan X-Trail is retailing at Sh2 million, a drop from the sh2.3 million at the start of the year. Falling prices offer a major boost to dealers who have since last year grappled with low sales as prices of the units soared in the wake of the shilling’s woes against the dollar.
The shilling had been on a free-fall since 2021, directly affecting prices of imported goods such as used cars and petroleum products.
Prices of second-hand cars had surged by upwards of Sh600,000 in the last four months of last year, underscoring the impact of the shilling’s woes.
Dealers had earlier projected that prices of imported second-hand cars would drop in the wake of the shilling’s rally against the dollar.
Japan is the single biggest source of second-hand cars in Kenya, with the popularity of the units driven by their low prices relative to the new cars.
