CFAO Motors Kenya has regained its leadership in the new luxury car business, taking a 54.5 percent market share in the nine months ended September when the industry recorded a 33.7 percent sales slump.

The company, the result of the merger between the former DT Dobie and Toyota Kenya, sold 30 Mercedes cars in the review period according to data from the Kenya Motor Industry Association (KMIA).

This was a drop from 32 units of the German models it sold a year earlier when its market share stood at 38.5 percent. Besides Mercedes, CFAO sells multiple other vehicles including Toyota, Volkswagen and Hino models.

Total sales of luxury cars declined to 55 from 83, performing much worse compared to the overall new vehicle market where orders slumped 11.6 percent to 8,715 from 9,868.

Inchcape Kenya, the only other dealer in the luxury segment, registered a decline in sales across most of its diversified brands.

Sales of its BMW cars fell to seven from 21 while those of its Land Rover Defender and Discovery models shrunk to 12 from 15.

Orders for its Range Rover cars plunged to four from 14. The dealer, however, sold two Jaguar models in the review period, up from a single unit a year earlier.

This brought its total sales to 25, giving it a 45.5 percent market share that saw it fall behind CFAO. The dealer had a leading market share of 61.5 percent in the same period last year when its sales aggregated to 51.

The fall in demand for luxury cars comes amid worsening economic conditions featuring rising interest rates and weakening of the shilling against hard currencies, factors which have also served to inflate prices of the high-end vehicles.

Many companies are also reporting a mix of losses and reduced earnings, partly due to a jump in costs and subdued consumer demand.

Prices of assets like real estate and listed equities have also come under pressure from local as well as global economic developments such as rising interest rates in developed economies.