THE MOTOR INDUSTRY FACING THE ECONOMIC SHOCKS OR IS IT A CASE OF FAILING TO ADOPT?

Eneke the bird was asked why he was always on the wing and he replied: ‘Men have learnt to shoot without missing their mark and I have learnt to fly without perching on a twig. ‘(Things Fall Apart, Chinua Achebe)

The public notices issued by CMC over the winding up of operations was sad news and a bitter pill to swallow for many of us. This is the sad and unfortunate reality of many companies where they have to make a decision on whether to keep fighting or to throw in the towel! The sad news comes at the backdrop of another notice issued last year by Mobius, but fortunately, they were saved by a “mysterious investor”. There is not much that has been said since then about Mobius.

I am cautious to raise a concern of job losses, which of course will be there, but as CMC winds down, we had new players coming into the motor industry in Kenya like Caetano who took the Ford franchise from CMC. This is not an indication that there is a problem with the market, rather some market players fail to understand the Kenyan market and the famous statement by Michael Joseph in which he mentioned that Kenya is a “peculiar” market. In the present moment, most Kenyan companies have to juggle between the harsh economic conditions and the “peculiarity” of the Kenyan market.

The GoK needs to align its policies to protect industries and protect employment and thus protecting KRA targets. I know it’s a double edged sword for the Government balancing on protecting employment in the motor industry. The local motor industry for new cars in Kenya has also been drastically affected by the influx of show rooms for used cars. Which is the lesser evil and which sector has created more employment: Used vs New cars dealers? CFAO motors has strategically engaged in the used car industry. They have both used and new cars and excellent after sales service. Other local dealers for the car brands are Crater Automobiles, Ryce Motors, Caetano, DT Dobie, Isuzu etc

Yes, we are faced with the harsh reality of Kenya facing job losses as companies in the country look towards winding. CMC motors Group which has been in businesses for 40 years and has played a vital role in supporting East Africa’s agricultural sector through the delivery of quality services, mechanization solutions and steadfast solutions to its customers.

This has raised lots of concerns about the state of Kenya’s business Market, even with the transformation program initiated in 2023 by CMC.

We have witnessed companies closing down completely and other have adapted a distribution model where they produce goods in low-cost manufacturing countries and then supply in the country in third party.

Some of the reasons attributed to companies winding up is because of the high operational costs, high tax rates, high prices in license and also the government have allowed cheaper imports in the country mostly from Asia, bringing competition to local manufactures.

I urge the Government to find an urgent solution mostly after the closure of CMC Motors, to keep these companies from ceasing operations. They should improve the business environment, streamlining regulations and improving the ease of doing business in the country otherwise, we shall witness the domino effect.