Despite Kenya’s tough economic climate, characterized by extended consumer fatigue, the trucks and buses market remains a promising avenue for growth, particularly in value-driven segments. Deluxe Trucks and Buses East Africa, the official distributor for Ashok Leyland Trucks and Buses, has reported a 50% increase in sales since the beginning of the year, showcasing the market’s resilience.
The industry, valued at approximately USD 2 billion, has experienced significant growth in recent years, fueled by infrastructure development, urbanization, and the expanding e-commerce sector. However, this growth has not been without challenges. Economic pressures, new taxes, political unrest, volatile currency exchange rates, and increased fuel costs have contributed to a significant 17-18% market contraction compared to the same period last year.
Hussein Kamal, the recently appointed General Manager of Deluxe Trucks and Buses East Africa, attributes this contraction to the broader economic difficulties facing the country. Businesses are struggling with affordability, access to capital, and high operational costs, reflecting the challenges across the economy.
Despite these hurdles, Deluxe Trucks and Buses remains optimistic. The company has sold 92 trucks since the start of the year, out of the 3,564 commercial vehicles sold in Kenya during the first half of 2024. With an ambitious target to secure the number two position in overall sales by the end of the year, the company is focusing on systematic growth, beginning with the tipper segment.
“This growth indicates the potential within the market for value-oriented products in the light and intermediate commercial vehicle segments,” said Kamal. “Our numbers may be modest compared to the competition, but we see significant opportunities for growth over the next year.”
Kamal, a 20-year veteran of the industry, believes that demand for trucks and buses in Kenya remains strong due to competitive pricing, high quality, and comprehensive after-sales support—key areas where Ashok Leyland excels. Positioned as a challenger brand, Ashok Leyland offers up to a 5-year or 500,000-kilometer warranty, making it an attractive option in today’s tough economic environment.
For example, the Ashok Leyland Phoenix light truck allows customers to calculate the cost of transporting goods for up to four years, demonstrating long-term value and return on investment beyond the initial purchase price. With this strategic positioning, Deluxe Trucks and Buses is eyeing a 20% market share in the fast-moving consumer goods segment—accounting for over 50% of all truck sales in Kenya—by the end of 2025.
“We anticipate a period of consolidation in the short term, with growth prospects improving as the broader economic situation stabilizes,” Kamal explained, expressing cautious optimism. The company measures success using a “cost of operations” metric tailored for different market segments.
To address the high operating costs that often elevate the total cost of ownership—a common challenge for commercial vehicles—Deluxe Trucks and Buses offers up to 95% financing or refinancing through strategic partnerships with major commercial banks. This approach directly tackles issues of affordability, ensuring that customers can continue to invest in high-quality, reliable vehicles even in challenging economic times.
