Despite facing a tough economic climate marked by extended consumer fatigue, Kenya’s truck and bus market remains competitively attractive, particularly in value-driven segments.
According to Deluxe Trucks and Buses East Africa, the official distributor for Ashok Leyland Trucks and Buses in the region, the market has demonstrated resilience with a 50 percent increase in sales since the start of the year.
The commercial vehicle industry in Kenya, valued at approximately USD 2 billion, has seen significant growth in recent years, driven by infrastructure development, urbanization, and the expanding e-commerce sector.
However, the market has also faced substantial challenges, including economic pressures, new taxes, political protests, volatile currency exchange rates, and rising fuel costs. These factors have contributed to a market contraction of about 17-18% compared to the same period last year.
Hussein Kamal, the recently appointed General Manager of Deluxe Trucks and Buses East Africa, noted that these challenges are reflective of the broader economic difficulties affecting businesses across the country. “Businesses are struggling with affordability, access to capital, and high operational costs,” Kamal said.
Despite these challenges, Deluxe Trucks and Buses remains undeterred. The company has sold 92 trucks so far this year, out of the 3,564 commercial vehicles sold in Kenya during the first half of 2024.
Deluxe has set its sights on systematic growth, particularly within the tipper segment, and aims to secure the number two position in overall sales by the end of the year.
“This growth indicates the potential within the market for value-oriented products in the light and intermediate commercial vehicle segments,” Kamal said. “Our numbers may be modest compared to the competition, but we believe there are great opportunities for growth over the next year.”
With two decades of industry experience, Kamal believes that the demand for trucks and buses in Kenya remains robust. Competitive pricing, high-quality vehicles, and comprehensive after-sales support are key drivers of this demand—areas where Ashok Leyland excels.
Positioned as a challenger brand, Ashok Leyland offers a 5-year or 500,000-kilometer warranty, making it an attractive option in the current economic environment.
The Ashok Leyland Phoenix light truck, for instance, allows customers to calculate the cost of transporting goods over four years, offering long-term value and return on investment beyond the initial purchase price.
Deluxe Trucks and Buses is confident in its ability to capture a 20% market share in the fast-moving consumer goods (FMCG) segment, which accounts for over 50% of all truck sales in Kenya, by the end of 2025.
“We expect a period of consolidation in the short term, with growth prospects improving as the broader economic situation stabilizes,” Kamal explained. The company measures success using a “cost of operations” metric tailored for different market segments, addressing the high operating costs that often elevate the total cost of ownership for commercial vehicles.
To tackle issues of affordability, Deluxe Trucks and Buses has established strategic partnerships with major commercial banks, offering customers up to 95% financing or refinancing options. This approach aims to reduce the financial burden on customers and support the company’s growth objectives in the Kenyan market.
