Kenya new car sales fall in 2017

NAIROBI, Jan 31 (Reuters): New vehicle sales in Kenya dropped 20.78 per cent last year, hit by a sluggish economy, a prolonged presidential election and an interest rate cap, the umbrella body for the industry said on Wednesday.

Global carmakers such as Volkswagen have been investing in vehicle assembly in the East African nation in recent years, attracted by its long term economic growth prospects and its strategic location as a hub for the region.

The industry sold 10,722 vehicles last year, down from 13, 535 in the previous year, said Rita Kavashe, the chair of the Kenya Vehicle Manufacturers Association.

"It is just the poor performance of the economy for quite a bit of last year (that contributed to the decline)," she told Reuters.

Economic growth was 4.4 per cent in the third quarter of last year, the slowest quarterly pace since 2013, as the country was hit by political uncertainty after the Supreme Court nullified the initial presidential vote.