Kenya’s automotive sector is witnessing a significant shift as demand for locally assembled brand-new vehicles increases. Industry experts point to enhanced manufacturing investments, improved financing options, and expanding transport infrastructure as key factors behind this growth.
Historically dominated by imported used cars due to their affordability, the market is now seeing a growing preference for new vehicles. Buyers are attracted by manufacturer warranties, structured maintenance services, and availability of genuine spare parts, which offer greater reliability and cost-effectiveness in the long term.
Financing and Infrastructure Boost Sector Growth
Financial institutions have introduced tailored asset financing solutions for businesses, transport operators, and individual buyers, making new vehicles more accessible. This has enabled companies to expand their fleets, supporting sectors reliant on transport services.
Meanwhile, Kenya’s ongoing investments in roads, ports, and regional trade corridors, particularly along the Northern Corridor, are facilitating the movement of goods and stimulating demand for commercial trucks and passenger vehicles.
Industry Expansion and Job Creation
TransAfrica Motors, a notable player in the local assembly market, has expanded its production capacity dramatically since opening its Kenyan plant in 2014. The company now assembles over 3,000 units annually, including FAW trucks and Jetour passenger vehicles, up from about 200 units previously.
Yusuf Noorani, Financial Controller at TransAfrica Motors, highlighted that more consumers are opting for new vehicles due to concerns over the reliability and maintenance costs of used imports. The company also plans to open a large truck servicing facility in Mlolongo, Nairobi, expected to create more than 400 jobs and serve up to 300 trucks simultaneously, enhancing efficiency for transporters along key routes.
Financial Support from Banks
Equity Bank’s Head of Asset Financing, Beatrice Nyambura, noted the bank’s role in supporting the sector by offering financing of up to 95% for FAW trucks and full financing for Jetour vehicles, with repayment periods extending to 72 months. She observed that customers are growing their fleets from single trucks to hundreds, driven by the expanding transport and logistics industry.
Opportunities and Challenges Ahead
Stakeholders emphasize that strengthening local vehicle assembly could unlock broader economic benefits, including skill development, manufacturing growth, and enhanced logistics services. However, challenges such as competition from imported vehicles and the need for sustained investment in local capacity remain.
This upward trend aligns with Kenya’s broader ambitions to deepen manufacturing and boost the automotive sector’s contribution to the national economy.
