Business Today

SHILLING MATTERS
The weakening shilling against major currencies continues to pile pressure on sales of used cars whose orders dropped by 18.2 per cent in quarter three, taking the reality of the volatile currency to the doorsteps of auto dealers.

Dealers said the rising cost of used cars, which has risen by more than 30 per cent since the year began, has affected orders with rising inflation depressing purchasing power.

The order book for most dealers has been thin and potential buyers are adopting a wait and see attitude hoping that prices will fall,” Antony Mwaura, a dealer in second hand cars at Hilltop Junction Motors told the Business Daily earlier.

 We used to sell 20 to 30 cars a month last year, but currently we are selling about 10 to 15.” The weak shilling against the Japanese yen and the dollar together with rising freight charges have seen the cost of imported cars rise by a third this year.

The shilling is trading at about Sh90 to the dollar, up from Sh80.70 in January while the Japanese Yen is averaging Sh116 from Sh99.40 at the start of the year.

Though the shilling has appreciated against the twin countries in the past months from a high of Sh107 to the dollar and Sh132 to the Yen, auto dealers are yet to pass on the benefits to consumers.

For instance, a 1,800cc Toyota Premio now retails at Sh1.45 million up from Sh1.1 million in January.
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