CFAO Motors, DT Dobie merge to sell multiple car brands under one roof

Motor vehicle dealers CFAO Motors Kenya and DT Dobie have merged their operations to become one entity, CFAO Motors Kenya, in a bid to increase efficiencies and grow market share. The merger, which took effect on April 1, 2023, saw DT Dobie transfer its business assets to CFAO Motors Kenya, which was formerly Toyota Kenya.

The two companies have been operating independently despite their common ownership for the past decade, and the merger is part of CFAO Group’s internal business reorganisation project to streamline and simplify the structure of its mobility business in Kenya.

As a result of the merger, the former Toyota Kenya has expanded its multi-brand portfolio, relinquishing the Hino trucks and Suzuki passenger car dealership to DT Dobie. The merged entity now has a market share of nearly 30%, making it the second-largest dealer by unit sales after Isuzu East Africa, which has a 44.7% market share. CFAO Motors sold 3,084 units last year, giving it a 23.1% stake in the overall new vehicle market, while DT Dobie sold 772 units, earning a 5.8% market share.

The operations of the merged entity will be divided into three main divisions.

1. The Toyota and Yamaha division will be headed by Joshua Anya, Deputy Managing Director, and will oversee all Toyota business, Automark pre-owned vehicles, and the Yamaha 2-wheel division. Anya will also be responsible for the body and paint shop.
2. Chris Ndala, DT Dobie Deputy MD, will head the multi-brand and equipment division, which will oversee multi-brand passenger car makes, including Volkswagen, Suzuki, and Mercedes-Benz passenger cars. The equipment division will include all the company’s truck and bus business with Hino, Hyundai, Mercedes Benz, and Sinotruk (HOWO).
3. The Winpart and Autofast division will be headed by Abderrahmane Mairi, Chief Operating Officer, who will oversee the value parts as well as Autofast quick service stations in partnership with TOTAL Energies.

The merged entity has also expanded the local assembly offering by CFAO Motors Kenya, combining the assembly of LandCruiser 79 (LC79), Hilux pick-ups, Hiace, and Hino trucks at Associated Vehicle Assembly (AVA) in Mombasa, and the VW Polo, Tiguan, T-cross, Mercedes truck and buses, and Hyundai trucks at Kenya Vehicle Manufacturers (KVM) at Thika, Kiambu County. CFAO Motors Kenya now has the largest dealer network in the country, with 36 branches, dealerships, and authorized service centers.

The merger has resulted in an unspecified number of job losses, with the terminations occurring last month. The move comes as sales on luxury vehicle brands such as BMW and Mercedes-Benz have dropped by 65.5% in the first quarter of 2023, according to data from the Kenya Motor Industry Association (KMIA).

The slump in car sales comes at a time when the country’s shilling is depreciating against the US dollar, and the Central Bank of Kenya has hiked interest rates, making procuring loans more expensive. However, CFAO Motors saw an increase in sales by 2.9% in the previous quarter, having sold 793 units.

Speaking during the announcement, Managing Director Arvinder Reel said, “This new business positioning greatly enhances our automotive value proposition in the market with the largest portfolio of mobility solutions across this wide segment of customers as well as the largest aftersales service network in the country.” Reel added that the merger provides an opportunity to provide customers with the right mobility solutions and that they are expecting an increase and sustainability in sales.