Nairobi, Kenya, the demand for cars in Kenya has experienced a slow down over the last couple of months.
Interviewed by Business Daily, the Kenyan Auto Bazaar Association Secretary (Charles Munyori) attributed this to the capping of interest rates that happened late last year, limiting access of credit to middle income earners who now can’t access funds to buy motor vehicles.
Car dealers may be complaining about decreased sales and attributing this to numerous factors, however
lack of market data to understand impacts on the demand and adjust the business accordingly is the main area to look at. A partnership between Cheki (Kenya 1st motor vehicle online marketplace) and Data Fintech (a Nairobi based consumer data broker) is solving this information gap, providing new automotive market data every month.
Data collected from Cheki’s website cover more than two years and all categories of vehicle and brands, allowing Data Fintech to provide critical trends for:
• vehicles price trends,
• consumer demand, and
• Unit in Operation (UIO), it means the vehicle on the road. A critical metric for the spare part business
According to the Data Fintech analysis, cars between 6-10 years experience high demand, accounting for about 66% of all cars for sale in Quarter 1 of 2017. Out of these, 3459 of them (13%) of them had mileage of 50,000-100,000Km. The age and the state of these cars speak for themselves, they will definitely need more service in the long run. Here is where the opportunity lies for car dealers.
Bundling Maintenance Service.
If you are selling second hand cars between 6-10 years old, logic dictates that these cars will need service and maintenance. Dealers should use this opportunity and not only stock older cars but partner with automotive maintenance businesses or start their own. Once you sell a car, maintain the relationship with the customer and add servicing of the vehicle as a value-added proposition. This will not only increase your revenue, but will ultimately increase your car sales by having a lifetime customer. Alternatively, look to stock spare parts of various car manufacturers to build a strong service department.