Dissecting High Level Trends in the Motorcycle Industry in Kenya

The motorbike industry in Kenya has experienced significant growth and transformation in recent years. Motorcycles have gained popularity as a means of transportation for both goods and people, primarily due to their ability to navigate through traffic congestion and reach destinations quickly. This trend is particularly evident in urban areas where traffic congestion is a major challenge.

A significant number of people rely on motorbike taxis called boda-bodas for daily transportation. This sector creates around 1 million direct employment opportunities for drivers and is projected to triple by 2030. However, these vehicles are highly polluting, leading to deteriorating air quality and health risks. The government and private sector are actively working towards transforming the transportation sector by promoting electric motorcycles as a zero-emission alternative.

One notable trend in the industry is the rise in the number of locally assembled motorcycles, which has almost caught up with the number of imports. Motorcycle imports rose 1.6 times from 145,900 in 2016 to 232,900 in 2020 while locally assembled units nearly doubled from 108,100 to 210,900 over the same period. This indicates that local firms are gaining a price advantage, partly driven by tax incentives. The increase in locally assembled units has contributed to the growth of the industry and has allowed for the creation of local manufacturing jobs.

However, despite the growth in the motorbike industry, there are economic challenges that impact the purchasing power of consumers. While the official GDP data reports a positive growth rate, there has been a decline in per capita income and an increase in poverty levels. This is attributed to factors such as climate change effects, rising imported food and energy prices, and other economic hardships faced by the population.

In terms of sales and demand, there has been a notable decline in motorcycle sales, particularly in the public transport and courier services sector. This indicates a potential easing of demand from these sectors, which have traditionally been the main users of motorcycles for their operations. The decline in sales may be attributed to various factors, including changes in consumer preferences, economic challenges faced by potential buyers, and the impact of government policies such as increased taxes on motorcycles.

The dominance of motorcycles in the Kenyan market is expected to continue in the coming years. The Kenya Two-Wheeler Market is projected to grow at a CAGR of over 5% during 2021-2025. The major factors propelling the growth of the market are increasing per capita income, the growing demand for affordable transportation in the country, worsening traffic gridlocks, and rising fuel prices. The country’s transport system, especially in rural areas, is underdeveloped, and motorcycles are extensively used as a reliable mode of transportation in such regions. The inefficiency of public transport further creates opportunities for two-wheeler companies to cater to the transportation needs of the population.

Major players in the Kenyan motorbike market include Bajaj, TVS, Hero, Honda, Kymco, Kawasaki, Suzuki, SYM, Piaggio, and CF Moto. These companies are actively investing in advanced technologies and launching new products to stay competitive in the market. Strategies such as mergers and acquisitions and new product developments are also employed to maintain a strong market position.

Kenya’s motorcycle industry is booming, buoyed by the ever-growing motorcycle taxi (Boda Boda) industry. There are over 2 million motorcycles registered in Kenya. Estimates put the total number of registered motorcycles in the wider East African region at well over 5 million motorcycles, all of which are essentially internal combustion engine motorcycles.

According to the latest Economic Survey from the Kenya National Bureau of Statistics (KNBS), sales of motorcycles in Kenya in 2021 increased by 15.6%, following an impressive 17.4% growth in the lockdown-affected year of 2020. Motorcycle registrations saw a jump from 246,705 units in 2020 to 285,203 units in 2021, which is more than 1.5 times the number registered in 2018.

While 2021 witnessed a significant increase in new motorcycle registrations, reaching 285,203 units, there was a notable decline in registrations in 2022, with only 131,513 units registered.

Motorcycle Registrations in Kenya Over the Last 6 Years

Year 2016 2017 2018 2019 2020 2021 2022
Motorbikes Registered 119,724 186,434 188,994 210,103 246,705 285,203 131,513
Source: KNBS 2022 Economic Survey

This decline may be attributed to various factors, including the increased cost of motorcycles due to higher taxes imposed by the government. The excise tax on motorcycles has risen, making them more expensive for consumers.

The market peculiarities are similar to those of other low-income markets. While premium brands are represented in the country, 99.9% of sales are concentrated in the 100-150 cc segment, which is dominated by Indian and Chinese manufacturers.


Author: Victor O. Nyakinda

Transport Sector Lead at Fie-Consult