In 2024, Kenya experienced a decline in motorcycle imports, with numbers dropping by 36.2% from 64,039 units in 2023 to 40,840 units.
This downturn can be attributed to several key factors that have influenced the market dynamics.One of the primary reasons for the decline is the increased cost of importing motorcycles.
The depreciation of the Kenyan Shilling against major world currencies has made imports more expensive.
As the local currency weakens, purchasing goods from overseas becomes costlier, directly impacting the affordability of imported motorcycles.
Additionally, higher taxation has played a big role in reducing motorcycle imports.
In July 2023, the Kenya Revenue Authority increased the duty on imported vehicles from 25% to 35%, leading to a substantial rise in overall vehicle prices.
This increase in import duty, along with additional excise duty and value-added tax (VAT), has contributed to the escalating costs for both dealers and consumers.
The growth of local assembly plants has also impacted the importation of motorcycles.
Several companies have established assembly plants in Nairobi and Mombasa, aiming to meet the local demand and reduce reliance on imports.
This shift towards local assembly not only supports the domestic economy but also offers more affordable options for consumers, thereby decreasing the need for imported units.
Market saturation is another contributing factor to the decline in imports.
The motorcycle sector in Kenya has seen rapid growth over the past decade, with motorcycles becoming a common mode of transport, especially in rural areas.
However, this rapid expansion has led to a glut in the supply of motorcycles, bringing the industry near the saturation point.
With over 1.8 million riders in the country, the demand for new motorcycles is not growing as much as before, reducing the necessity for additional imports.
The combined effect of these factors has led to a big reduction in motorcycle imports.
The increased costs due to currency depreciation and higher taxes have made imported motorcycles less affordable.
The expansion of local assembly plants provides alternative options for consumers, further diminishing the demand for imports.
Moreover, market saturation indicates that the existing supply sufficiently meets the current demand, lessening the need for additional imported units.
This decline in motorcycle imports has broader implications for the Kenyan economy.
The motorcycle industry has been a ssource of employment, particularly for the youth, and a decrease in imports could affect job creation in this sector.
Furthermore, the government’s revenue from import duties may decline, potentially impacting public finances.
However, the growth of local assembly plants could offset some of these negative effects by creating jobs and generating tax revenue domestically.
The 36.2% drop in Kenya’s motorcycle imports from 2023 to 2024 is the result of higher import costs due to currency depreciation, increased taxation, the rise of local assembly plants, and market saturation.
These factors have collectively reshaped the dynamics of the motorcycle market in Kenya, leading to a notable decrease in the importation of motorcycles.
