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Prices of used cars increase
The increase in price of used cars has been occasioned by Covid-19 related expenses and shipping costs. PHOTO | FILE
What you need to know:
- According to dealers, the increase in prices has been occasioned by Covid-19 related costs, a rise in shipping costs and an artificial scarcity created by the high demand for ships.
Prices of used motor vehicles have increased by at least Shs1m due to Covid-19 related and shipping costs, according to dealers.
The costs, which include a rise in shipment fees and certificates for drivers that transport vehicles from Mombasa to Kampala, among others, dealers say, have become hard to accommodate within their operations thus necessitating that they are transferred to the final consumer.
Currently, it’s a requirement that drivers who pick motor vehicles from Mombasa to Kampala are first tested for Covid-19 to and from.
The prices, which cut across to different models, according to dealers, have increased by between Shs1m and Shs1.5m.
Mr Francis Kanakulya, Associated Car Dealers spokesperson, early this week told Daily Monitor that there was a crisis in shipping of goods across the world thus creating an artificial scarcity of certain goods in a number of countries including Uganda.
Therefore, he said, this has created pressure on existing supplies resulting from delayed arrivals.
“A container, which used to cost $2,500 to load has since gone up to $4,500 and those who bring one off units have no space because of the scarcity of ships,” Mr Kanakulya said, noting it will long before the situation normalizes, which has forced dealers to transfer the cost on consumers.
Mr Mustafah Ssemulinde, the proprietor of Semu Motors in Kyambogo, Kampala, said that because they are spending money on certain standard operating procedures against Covid-19, such costs have been drafted into the final product, which has forced a price increase.
“Yes, the price of used motor vehicles has gone up because of [standard operating procedure] and cost of shipment. There are some costs we can accommodate but these have been transferred to the final price of vehicles,” he said, adding that a vehicle that used to cost about Shs15m has now gone up to Shs16m or Shs16.5m.
The industry price increase is estimated to be between 6.25 per cent and 9 per cent spread across all sizes and models.
Uganda is a net importer with much of the country’s motor vehicle imports sourced from Japan, India, South Africa, UK and Germany.
According to data from Uganda Revenue Authority earlier this year, a total of 5,188 units were cleared in December 2020, which was a 22 per cent increase from the 4,012 units in the previous month.
URA data indicates that in the first half (July-December) of the 2020/21 financial year, a total of 25,495 motor vehicle units were cleared into the country indicating, which was an increase of 8 per cent from the 23,257 units cleared in the same period in 2019/20.
However, worth noting is during the 2020/21 first half, all the months except November, the units that were imported surpassed those imported in the country in the same cycle on 2019/20.
Sold units rise amid covid-19
Despite Covid-19 related disruptions, importation of motor vehicles has increased thus dispelling the claim that prices might have increased due to scarcity.
In July 2020/21 a total of 4,360 units were imported into the country up from 4,276 units cleared in the same month the previous cycle.
