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KAMPALA, UGANDA | THE INDEPENDENT | CMC Motors Group, one of the oldest dealers in motor vehicles in East Africa, has announced it is ceasing operations in Uganda, Kenya and Tanzania.
The Company, originally known for the distribution of Ford, Mazda and Suzuki vehicles said in a January 17 statement, that it had decided to gradually wind down operations in the region in full compliance with local regulations and distributorship agreements.
“This decision follows a thorough evaluation of the business in light of sustained market challenges, including economic pressures, currency depreciation, and rising operational costs,” said the statement.
CMC was started in 1948 when British settlers, Allen and Cooper bought Clement Hirtzel’s Nairobi Motor Garage which had been started in 1912 in the capital of Kenya (then British East Africa).
The two men renamed the company Cooper Motor Corporation and diversified importation from the Ford Model T to Suzuki, Mazda and Volkswagen, and more recently Škoda, Maruti, Nissan Diesel cars and the flagship product, Land Rover.
It also started an assembly plant dealing in agricultural and earth-moving equipment like Bobcat, Liebherr, Case CE, Case IH and New Holland. Its assembling business that started in 1974 involved the Volkswagen Golf, and then Volkswagen Santana, Jetta and Transporter.
CMC’s challenges came to light in 2023 when it announced it was exiting the car and truck business to concentrate on agriculture machinery.
In 2013, the al-Futtaim Group of DUBAI announced plans to purchase CMC Group, with Headquarters in Kenya, at a proposed value of 86.76 million dollars.
The transaction was completed in 2014. Al-Futtaim Group has investments in automotive, electronics, insurance, services, real estate and retail, including Carrefour supermarkets in Uganda.
CMC’s challenges came to light in 2013 when it announced it was exiting the assembling and dealership in passenger vehicles to focus on agriculture machinery and earth-moving equipment as well as motorcycles.
Sakib Eltaff, Managing Director of CMC Motors Group, then said that this was because the agriculture sector in Africa was “going from strength to strength in the past few years, and the demand for agriculture solutions is now stronger than ever.”
Until then, it was only assembling the Mazda truck models; the T3500 and the BT-50, but this seems not to have reversed their challenges.
“However, despite restructuring efforts and a transformation program initiated in 2023, the market conditions have not provided a sustainable path forward,” the statement says.
The implementation of this restructuring resulted in the retrenchment of close to 200 employees, and more are now expected to be released with this winding down.
“The company is committed to supporting its employees during this transition and will ensure a smooth and orderly wind-down in adherence to all relevant agreements and regulations,” it says, adding that this decision followed a thorough evaluation of the business in light of sustained market challenges.
The challenges include economic pressures, currency depreciation, and rising operational costs, coupled with the changing consumer preferences as well as well as competition from the increasingly cheaper and more easy-to-maintain vehicles, according to vehicle users.
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