Kenyan car buyers are switching to hybrid models in droves

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

Used vehicle dealers say they have seen a surge in sales of smaller vehicles and hybrid vehicles since the pandemic began.

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

Sometimes the electric motor does all the work, sometimes it’s the gas engine, sometimes they work together. The result is reduced gas mileage and therefore reduced fuel consumption.

With premium unleaded petrol costing around Sh160 a liter and diesel at Sh140, Kenyans are being forced to hold onto their wallets.

“Right now, small vehicles like the Toyota Vitz are in high demand due to their engine power, and the attempt to get them to the pump is very little,” said Ken Baraza, manager of the Plus Point automobile business on Ngong Road.

“Fuel costs have had an impact on the running costs of the vehicles. Most people are now opting for smaller engines, and Toyota in particular designs and manufactures hybrid engines that typically have very low fuel consumption.”

Fuel prices are changing purchasing behavior and there are early signs that people may be reconsidering their purchases.

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

The Vitz model, which belongs to the hatchback family, has a displacement of around 1.5 liters and was sold for Sh1million last year but has now shot up to around Sh1.4million.

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

Used car dealers in Nairobi say there has been growing customer interest in more fuel-efficient cars, particularly hybrids, although parts shortages have limited the supply of new models.

Kenyans are buying more used BMWs and smaller vehicles, according to Terry Mwihaki, manager at Lancet Motors, a used car dealership in Nairobi.

“This month we have sold about 15 cars between 1200 and 1400cc, at an average price of Sh1 to 2 million,” Ms Mwihaki said.

Ms. Mwihaki warned first-time buyers that engine performance and fuel efficiency are key considerations when purchasing a vehicle.

“One has to be very careful when buying a car at Sh150 per litre [of fuel] that’s a lot for a higher cc. For example, if you get a 3000 it will weigh on your pockets, so people currently tend to go for the 1200 with up to two litres. That’s what’s moving fast for us,” she says.

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

Car dealers and anyone who needs an affordable car is hit hardest.

Car companies have allocated those scarce chips to high-end and other vehicles that make the most profit, resulting in long waits for cheaper vehicles.

Drivers wait more than 12 months for delivery on some models. Used car prices are skyrocketing because of the lack of new cars.

The sticker shock is expected to continue as the spreading impact of the Covid-19 pandemic, exacerbated by the invasion of Ukraine, affects commodity prices and commodity supply chain movements.

“Most people are currently interested in hybrid vehicles because of fuel prices because they use less fuel. We’ve sold about four hybrid field vehicles in the last month,” said a Nairobi-based auto dealer.

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

I would bet you cannot drive thirty minutes on Kenyan roads without seeing at least one of these vehicles.

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

“We haven’t sold many larger vehicles in the last year, people shy away from models like the Toyota Landcruiser V8 [with up to 4461 cc]because the car is a fuel economy monster,” said Mr Ndwati.

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

The pandemic sparked debate around the world about moving from globalization to local sourcing of chips and many other industries to increase supply chain resilience.

They said they hoped the government would continue to support manufacturers and local assemblers, particularly as they pay very high tariffs on imported cars.