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Used car prices rise by 16%
Prices of used motor vehicle sales are increasing amid subdued demand. PHOTO | FILE
What you need to know:
- In 2019, according to a report by Ministry of Finance, passenger vehicles took the largest share of imported motor vehicles, costing Uganda $182.4m (Shs693b). These were followed by vehicles that carry goods ($132m about Shs501b).
Logistical challenges and an increase in transport prices have pushed up the cost of motor vehicles by an average of Shs1.7m, which represents at least 16 percent.
The increase comes on the back of a global pandemic occasioned by Covid-19 and an escalation in the general cost of goods and services across the globe.
Mr Francis Kanakulya, the Associated Car Dealers former spokesperson, told this publication on Wednesday they are struggling to contain prices within expected prices amid subdued demand and an increase in input costs.
For instance, he said, about six months ago a Toyota Filder, which cost $2,700, now goes for $4,500, while most third-generation vehicles, costing about Shs15m, have since increased to Shs18m.
The prices, dealers said, have been made worse by government’s policy, which demands that motor vehicles that are older than 15 years cannot be imported into the country.
Mr Mustafah Ssemulinde, the proprietor of Semu Motors in Kyambogo, Kampala, which mostly deals in third-generation motor vehicles, said: “Because of the ban, prices of newer vehicles have escalated and when you factor in the condition of the vehicle, taxes will be computed against this which makes the final cost high.”
Data from industry players suggests that motor vehicles brands (saloon) that are highly demanded by Ugandans such as Spacio and Raum are being phased out of the market, which leaves only costly brands such as Filder.
Price are estimated to have increased by between 11 percent and 16 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.
During the quarter ended December 2021, according to data from Uganda Revenue Authority, a total of 12,057 used motor vehicles were imported into the country, earning the government at least Shs375b in taxes.
URA data also indicates that 4,060 used motor vehicles were imported into the country in October 2021 but slightly reduced to 3,730 units in November, before picking up again to 4,267 units in December.
However, during December, data shows, the imports were almost 21 percent below the 5,188 units that were cleared in the same period in 2020. Motor vehicle imports form one of the largest imports with Ugandans spending above Shs2 trillion annually, according to data from the Ministry of Finance.
