Global Firms Compete For Share Of Kenya’s Lucrative Auto Market

Global Firms Compete For Share Of Kenya’s Lucrative Auto Market

Kenya’s auto business has recorded increased competition between U.S. and Japanese firms, each edging for a share of the country’s new vehicle market.

This battle pits Toyota Group’s trading unit, Tshusho Corp. against its rivals led by U.S. auto giant, General Motors East Africa (GMEA) Ltd. Watching from the sidelines is Kenya’s growing middle class who intend to buy more automobiles as the economy improves.

“We continue to leverage on the fact that we have been in this market for more than 37 years and have the required experience with products that have been tested,” GMEA managing director Rita Kavashe said in an interview with AFK Insider.

Unlike the competition, GM has three vehicle assembly plants in Africa including Kenya, Egypt and South Africa.

“Kenya is strategically located and is viewed so by any serious player,” Kavashe said. “This is why there is competition among auto dealers who want to use this location as a launching pad into the wider East African region.”

The latest figures from Kenya Motor Industry (KMI) put Tsusho Corp.’s market share — represented locally by Toyota Kenya — at 24.09 percent. Its closest rival, GMEA comes close at 24 percent.

But with Tshusho’s recent acquisition of local dealer DT Dobie, Toyota Kenya’s market share combined with DT Dobie’s 11.31 percent, gives it a 35.4 percent control of the local new car business.

“We are not worried about the growing competition. What concerns us is providing care and customer service to our clients. GM is also constantly looking out for opportunities out there,” Kavashe said.

In recent months, GMEA invested heavily in its vehicle assembly plant in Nairobi off Mombasa road, raising its capacity. Other dealers who in the past have been reluctant are moving to add floor space, dusting assembly lines or spending millions on new equipment and acquisitions.

Available figures show that demand in Africa’s new cars market will increase significantly over the next few years, pushed up by a growing middle-class in the region.