Kenyan car buyers shift to smaller vehicles, hybrid models in droves

Kenyan car buyers are opting for hybrid models following the rising fuel prices alongside the high cost of living due to the Covid-19 pandemic.

Dealers in second-hand vehicles say they have experienced a spike in smaller vehicles and hybrid sales since the onset of the pandemic.

A hybrid combines at least one electric motor with a fuel engine to move the car, and its system recaptures energy through regenerative braking.

Sometimes the electric motor does all the work, sometimes it's the gas engine, and sometimes they work together. The result is less petrol burnt and, therefore, better fuel economy.

With a litre of unleaded super petrol going for about Sh160 and that of diesel going for Sh140, Kenyans have been forced to hold onto their wallets.

“At the moment small vehicles like Toyota Vitz because of their engine capacity have a high demand and trying to get them at the pump is very minimal,” said Ken Baraza, manager at Plus Point automobile shop on Ngong Road.

“The cost of fuel has affected the running cost of vehicles. Most people are now going for smaller engines and specifically, Toyota is advancing and manufacturing hybrid engines, which normally are very minimal in fuel consumption.”

The fuel prices are altering buying patterns, and there are early signs that people may be rethinking their purchases.

Toyota Vitz, Honda Fit and Nissan Note in particular have become favourites among Kenyan households as more people prefer smaller vehicles of between 1200 cubic centimetres (cc) and 1800 cc.

The Vitz model, which belongs to the hatchback family, has an engine capacity of about 1.5 litres and was selling for Sh1 million last year but has now shot up to about Sh1.4 million.

Some of the fast-moving hybrid cars are from Toyota, Nissan and Honda.

Second-hand auto dealers in Nairobi say customer interest in more fuel-efficient cars, especially hybrid vehicles, has been growing, although shortages of parts have limited the supplies of new models.

Terry Mwihaki, manager at Lancet motors-a used car dealership in Nairobi says Kenyans are buying more second-hand BMWs and smaller vehicles.

“This month we have sold around 15 cars of between 1200cc and 1400cc averaging between Sh1 million and Sh2 million,” said Ms Mwihaki.

Ms Mwihaki cautioned first-time buyers that engine capacity and fuel efficacy are crucial considerations when buying a vehicle.

“You have to be very cautious when you’re getting a car, at Sh150 a litre [of fuel] that is a lot for a higher cc. For instance, if you get a 3000cc it will strain your pockets, so people are currently tending to go for the 1200cc up to two litres. That’s what is fast moving for us,” she says.

The auto dealers say global shortages of components such as microchips, exacerbated by Covid-19 restrictions in China, continue to hamper manufacturers’ ability to keep up with demand.

The pain is falling hardest on car dealers and anyone in need of an affordable car.

Auto companies have been allocating these scarce chips to high-end and other vehicles that generate the most profit, leading to long waits for less expensive vehicles.

Drivers are waiting more than 12 months to take delivery of some models. Used car prices are skyrocketing because of the lack of new vehicles.

The sticker shock is expected to persist as the rippling effects of the Covid-19 pandemic deepened by the Ukraine invasion affect the prices of commodities and supply chain movement of commodities.

“Most people right now because of fuel prices are interested in hybrids because they use less fuel. We have sold about four hybrid fielders in the last month,” said a Nairobi-based car dealer.

The Vitz and Honda Fit have established themselves as the tiny yet roomy, sporty benchmark for small vehicles.

I would bet you can't drive on Kenyan roads for thirty minutes without spotting at least one of these vehicles.

Mr John Ndwati, a sales manager at Valley Road Motors echoes the same sentiments that smaller cars are selling fast.

“Over the last year, we have not sold many larger vehicles, people shy away from models like Toyota Landcruiser V8 [with up to 4461 cc], because the car is a beast on fuel consumption,” said Mr Ndwati.

The dealers said local manufacturing can be an alternative to such global supply chain disruption.

The pandemic triggered a debate globally on moving away from globalisation to local sourcing for chips and many other industries to increase resilience in supply chains.

They said they hoped the government would continue supporting manufacturers and local assemblers especially because they pay very heavy duties on imported cars.