Kenya's Automotive Sector is well established, compared to its East African counterparts making it one of the most promising and fastest-growing automobile markets in the East African Region. Labour availability, R&D efforts, geographic advantage and government support for the Kenya automobile industry are key factors for growth.
With a positive outlook for the economy and greater purchasing power, automobile sales in the country are set to witness a strong surge in sales by 2030. OEM manufacturers have planned to expand their production bases in Kenya. The Government of Kenya recognises the automotive segment as a key revenue generator and is encouraging the flow of FDIs in the automotive industry.
According to Kenya National Bureau of Statistics (KNBS), the number of registered vehicles increased by a compound average growth rate of 9% between 2011 and 2019, rising from 1.6 million in 2011 to 3.3 Million in 2019.
This was largely driven by motorcycles and motor-cars which accounted for 46% and 32% respectively for all vehicle registered. Figures for Kenya's motorization rate differs depending on the source and range between 26 and 40 vehicles per 1,000 persons. This is forecast to increase to 70 in 2030, reflecting vehicle ownership growing faster than Kenya's population.
The automotive industry in Kenya is primarily involved in the assembly, retail and distribution of motor vehicles and grouped into five main sub-sectors namely: Motor vehicle assemblers, Trailer assemblers, Motorcycle assemblers, parts and components manufacturers, and Body builder's sub-sectors.
As new players continue to foray into the market, two wheelers, passenger cars and light commercial vehicles are witnessing a steady increase in demand.
The ongoing trend towards modernization and automation of electric and hybrid cars and the increased demand for advanced safety, connectivity, convenience and driver assist features are noted to shape the modern automotive industry in Kenya.