High tax is a major challenge slowing uptake of new vehicles due to prohibitive upfront costs.
Loxea, Managing Director Jennifer Kinyoe says the punitive tax regime has also made vehicle leasing out of reach for most members of the public and institutions.
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Speaking during a media briefing Wednesday, Kinyoe noted that the cost of financing is further compounded by high lending rates.
The latest data from Central Bank of Kenya indicates that commercial banks charge up to 27pc interest on loans.
However, despite the high cost of credit and taxes, Loxea remains upbeat amid a vibrant business environment, with the firm strategically positioning itself for further growth in the final quarter of 2024.
Since its inception in 2009, Loxea has steadily evolved, becoming a key player in the industry.
“The market outlook remains dynamic. We are experiencing substantial growth because of the increased demand. With Loxea solution, vehicles are always on the road as opposed to being in the yard,” said Kinyoe.
The leasing market is expected to show substantial expansion in the last three months of this year, driven by increased demand from businesses seeking cost-effective fleet management solutions, alongside a demand for fleet management solutions from our customers.
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Driven by increasing cost of acquiring new vehicles, businesses, organizations and government are turning to leasing as a means of cutting down on capital expenditure.
Loxea, is in 23 African countries and has more than 6,000 vehicles across Africa with multinationals being the biggest clients.
Master agreement is made at the Headquarter level then different countries get to finer details to get their leases depending on their tax regimes and other factors required to get the lease.
The Loxea Managing DirectorD said their biggest market is in West Africa; Ivory Coast, Senegal and Cameroon.
Kinyoe projected that the sector will witness an upsurge as companies across industries prioritize flexible vehicle leasing models to streamline operations, reduce costs, and improve fleet efficiency.
“Kenya’s vehicle leasing market is maturing, and Loxea has positioned itself at the forefront of this evolution. We have grown exponentially since 2009 by delivering tailor-made leasing solutions that meet the demands of businesses in Kenya’s vibrant economic landscape, and we are determined to capitalize on the momentum,” Kinyoe added.
Loxea’s market leadership is evident in the breadth of its corporate clientele, which spans across different industries. The company has invested heavily in customer-centric innovations, ensuring flexible, scalable, and sustainable leasing solutions.
Kinyoe added, “As we enter Q4 2024, we are excited about the opportunities to diversify our offerings. The dynamic nature of the vehicle leasing segment allows us to explore new products that cater to evolving client needs. Our goal is to remain agile, responsive, and focused on enhancing the value we bring to our clients.”
With its solid foundation bolstered by CFAO Mobility’s pole position in the automotive market, Loxea remains committed to expanding its portfolio of leasing services while upholding its vision to be the preferred partner providing innovative and cost-effective mobility solutions that not only meet the needs of today but also anticipate the challenges and opportunities of tomorrow through dynamic and motivated people in a sustainable environment.
The company’s proactive approach to market trends ensures it remains a trusted partner for businesses looking to optimize their vehicle fleets in a competitive landscape.
As Loxea continues to invest in its growth strategy, it remains bullish about the long-term outlook for vehicle leasing in Kenya.
