Automobiles & Accessories

A Small but Notable Sector

The Automobiles & Accessories sector is the smallest on the NSE, with limited listed companies. Despite its size, it offers insights into Kenya's consumer economy and transport sector.

Car & General (C&G)

Car & General is the primary listed company in this sector. Originally focused on automobile sales, C&G has evolved into a diversified trading and distribution company:

• Power products — Generators, water pumps, and power tools. C&G is a major distributor of Honda and other power product brands in East Africa.
• Two-wheelers — Motorcycles (boda bodas) have been a significant growth driver. The motorcycle transport industry in Kenya employs hundreds of thousands of riders, creating steady demand for new bikes and spare parts.
• Automobile distribution — Distribution of vehicles and spare parts, though this is now a smaller part of the business.
• Regional presence — Operations in Kenya, Uganda, and Tanzania provide geographical diversification.

Market Dynamics

The automobile sector in Kenya has unique characteristics:

• Import-dominated market — Kenya does not have significant local vehicle manufacturing. The market is dominated by imported new and used vehicles, primarily from Japan.
• Second-hand vehicles — Used vehicle imports represent a large portion of the market, limiting the potential for new vehicle distributors.
• Boda boda economy — The motorcycle transport sector has grown enormously, creating demand for affordable two-wheelers, spare parts, and accessories.
• Electric vehicle potential — Early-stage EV adoption in Kenya could reshape the sector over the coming decade. Companies like BasiGo are introducing electric buses, and electric motorcycles are being piloted.

Investment Considerations

Investing in this sector requires understanding its limitations:

• Low liquidity — With few listed companies and small market caps, trading volumes can be thin.
• Niche exposure — These are specialised plays on specific market segments rather than broad economic themes.
• Currency sensitivity — Companies that import products are sensitive to KES exchange rate movements, which affect the landed cost of goods.