New car sales in Kenya jumped by a quarter in 2021 as economic growth rebounded from a pandemic-induced slump the previous year, driving up demand, the industry association said on Thursday.

The East African nation is a small market for new vehicles due to limited purchasing power, which leaves most consumers buying second hand imports from Japan. But it has attracted investment from global automakers such as Volkswagen in recent years due to its growth potential.

Dealers sold 14,250 new vehicles, the Kenya Motor Industry Association (KMIA) said, up from 11,086 in the previous year. Last year's figure was higher than before the pandemic. The industry sold 13,199 vehicles in 2019.

The government allocated 600 million shillings ($5.30 million) to stimulate demand for locally assembled vehicles.

Demand for new vehicles came from security services such as the police, construction projects and small and medium firms, which were boosting operations in the second half of the year.

The government, under President Uhuru Kenyatta, has been trying to encourage local assembly of vehicles through tax breaks for firms and curbs on used imports, to create much needed jobs for the youth.

Reuters