‘Tokunboh’ Car Prices Slump As Covid-19 Cut Demand
LAGOS AUGUST 17TH (NEWSRANGERS)-Dealers in used cars have been forced to cut prices by up to 15 percent in response to depressed demand in an economy reeling from the effects of the Covid-19 pandemic.
Mazda Demio, Toyota Fielder, Toyota V8 and Subaru Outback are among the popular models whose yard prices have dropped by a range of between Sh100,000 to Sh1.2 million since the country recorded its first confirmed case of the coronavirus on March 12.
Dealers say they have been forced to cut prices to clear stocks in a market where the more a car remains unsold the more it loses value, partly due to a greater preference for the latest number plates.
Small business owners and professionals are the main buyers of second-hand cars and most of them have seen their incomes fall significantly from a mix of layoffs, unpaid leave, salary cuts and collapse of activity in various sectors.
Distressed sales of cars seized by banks and auctioneers have also served to expand supply in the market, further putting downward pressure on prices.
“People (dealers) have been forced to throw them away and there is no money flowing in the economy. Demand is not there. Dealers are stuck with the old stock from last year,” said Charles Munyori, the secretary-general of Kenya Auto Bazaar Association, which represents used car dealers.
Dealers make profits as low as Sh100,000 on some models, meaning that they risk having to merely break even or suffer losses in these crisis times.
businessdailyafrica.com
Short URL: https://newsrangers.com/?p=55508
Posted by News Rangers
on Aug 17 2020. Filed under Business, National.
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