- CMC Motors Group has withdrawn from the market in Kenya, Uganda and Tanzania due to economic challenges including high operating costs
- The company is one of the largest automotive assembly companies in Kenya and has been providing agricultural and technical solutions to farmers
- It emphasized its commitment to helping employees through change and ensuring positive change
CMC Motors Group is closing its operations in Kenya, Tanzania and Uganda after forty years in the automotive and agricultural sector in East Africa, leaving hundreds of its workers facing an uncertain future.
Source: Facebook
Why did CMC Motors Group leave the East African market?
The global company, which was bought by Dubai's Al-Futtaim Group in 2014, blamed the decision on ongoing market issues, such as economic pressures, currency devaluation, and rising operating costs.
In a statement on Friday, January 17, the company noted that a thorough assessment of the business environment preceded the decision.
“CMC Motors Group has announced its decision to stop its operations gradually in the countries of Kenya, Tanzania and Uganda in full compliance with internal regulations and distribution agreements. This decision follows a detailed assessment of the business in light of the ongoing challenges of the market, including economic pressure, currency. depreciation and rising operating costs,” it explained.
The company is one of the largest automotive assembly companies in Kenya and has been providing agricultural and technical solutions to farmers.
Unemployment is on the way
CMC Group said its restructuring efforts were fruitless, forcing it to shut down operations.
The company confirmed its commitment to support employees through the transition and ensure a smooth transition.
“Despite the restructuring efforts and the reform program launched in 2023, the market situation has not provided a sustainable path. The company is committed to supporting its employees during the transition and will ensure stability and stability in compliance with all the necessary agreements and regulations.”
CMC lays off 169 workers
In April 2023, CMC announced that 169 workers had been laid off after three car brands terminated their contract with the car supplier.
CMC, which sold the Ford, Suzuki, and Mazda car brands, moved into mechanized agriculture to support food security.
The main marketing brand of the company in this sector is the New Holland Tractors franchise.
Ford's departure dealt a blow to the company as the brand reported 78.7% of its total sales in 2022.
What other companies have come out of the Kenyan market?
The business environment in Kenya changed significantly in 2024 when several prominent companies in various sectors closed their operations.
Ukwala Supermarket Ltd completed liquidation on Friday, December 20, 2024. Its debt was about KSh 1 billion against assets of KSh 19 million.
In June 2024, High Court Judge Alfred Mabeya ordered the liquidation of Blue Shield Insurance. The order came after Mabeya agreed with the Insurance Regulatory Authority (IRA) that insurance with debts exceeding KSh 800 million cannot be revived.
Elsewhere, auto maker Mobius Motors closed for business on Monday, August 5, 2024.
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