Kenyan Automaker Mobius Motors Shuts Down Amid Market Challenges

Mobius Motors, the Kenyan car manufacturer known for its affordable SUVs, has opted for voluntary liquidation, a decision coming just over a year after the company announced ambitious plans to expand its manufacturing footprint into Tanzania and Uganda.

The company made its foray into the Kenyan automotive market in 2013, with the vision of selling low-cost vehicles to the local market. However, the reality on the ground has been starkly different. Kenyans, much like the broader African consumer base, have shown a preference for purchasing second-hand cars over new ones. The statistics are telling: out of the 130,000 cars imported into Kenya annually, a mere 9,500 are new, with even fewer Kenyans opting to buy these vehicles each year. In Nigeria, new car imports account for only about 15% of the total.

The allure of foreign second-hand cars lies in their affordability, resale value, and liquidity. Conversely, offloading a new, untested Mobius vehicle proves to be a much more challenging endeavor.

Local automakers like Mobius find themselves in a difficult position: they are unable to compete on price, and the vision of replacing imported vehicles with locally manufactured ones remains elusive. The case of Mobius Motors suggests that selling new cars at low prices in the African market is not a viable strategy.

In contrast, other local car manufacturers such as Nigeria’s Innoson have opted to sell at higher price points, relying on larger profit margins to offset lower sales volumes. Morocco’s Laraki has even pivoted to exporting its vehicles to the European market.

The lesson appears to be straightforward: instead of attempting to alter entrenched market behaviors, it may be more prudent for manufacturers to adapt to them. Competing in the new car market in Africa is fraught with challenges.

The financial difficulties faced by Mobius Motors were not the sole cause of its downfall. A combination of sluggish sales, minimal profits, and the diminishing purchasing power of Kenyans also played a significant role in the company’s gradual decline. Mobius Motors is now set to liquidate its assets, joining the ranks of other Kenyan businesses that have ceased operations this year.