Caetano Kenya Managing Director Aurelien Glay addresses customers and partners at the company's appreciation dinner. /HANDOUTFor many small businesses, owning a truck can be a major step towards growing the business. But the price of a commercial vehicle can make that dream difficult to achieve when a company has to pay the full amount upfront.
More Kenyan businesses are now turning to longer-term financing to get commercial vehicles without putting too much pressure on their cash flow.
The increased financing schemes saw new vehicle sales in Kenya climb nearly a fifth in the first half of the year as businesses ramped up investment in trucks, pick-ups and other commercial vehicles.
Data from the Kenya Motor Industry Association (KMI) shows dealers sold 7,466 new vehicles between January and June, up 19.4 percent from 6,254 units in the corresponding period last year.
Vehicle distributor Caetano Kenya says businesses have been able to access financing covering up to 100 per cent of the cost of a vehicle, with repayment periods stretching to eight years.
“Together, we are making it easier for businesses to access dependable mobility solutions while ensuring that customers receive the support they need throughout the ownership journey,” Caetano Kenya Managing Director Aurélien Glay said.
The strong perfomance has been pegged on affordable credit after eight consecutive base-lending rate cuts buy the Central Bank of Kenya, which has come down from a high of 12 per cent last year to the current 8.75 per cent.
According to Automobile dealer, some financing arrangements also offer a grace period of up to 60 days and working capital of up to Sh500,000. This gives business owners time to put their new vehicles to work before they begin making repayments.
For operators in transport, construction, logistics and other businesses that depend on trucks, the approach can make it easier to expand a fleet while keeping money available for fuel, salaries and other everyday expenses.
But longer loans also mean borrowers need to consider the total cost of financing. While spreading repayments over several years can make monthly payments more manageable, the overall amount paid can be higher because of interest.
The push for easier vehicle financing is also being accompanied by increased attention to keeping trucks on the road.
In Mombasa, where businesses depend heavily on transport and logistics, Caetano Kenya has expanded services including mobile technical support, maintenance, repairs and access to spare parts.
For a business owner, avoiding long periods when a truck is off the road can be just as important as getting the vehicle in the first place.
The company is also offering fleet-management technology to some Renault truck customers. The system allows operators to monitor their vehicles and track issues such as routes and fuel use.
Caetano Kenya is preparing to introduce light-duty electric trucks from JMC as businesses explore alternatives to conventional fuel-powered vehicles.
The move could give operators another option as fuel costs and environmental concerns increasingly influence decisions about the vehicles they use.
For entrepreneurs looking to expand, the changing vehicle market means buying a truck is no longer simply about finding enough money for the purchase price. Financing options, running costs, maintenance and fuel efficiency are becoming part of the decision.
With longer repayment periods now available, some businesses may find it easier to put a truck to work today and pay for it gradually from future earnings.
