Start-up makes brisk business out of car wrecks

As you walk through the gates of the building housing Haji Motors, behind Vision Plaza on Mombasa Road, a heap of stalled cars and cars wrecked in road accidents lie outside the garage, waiting on the technical team to attend to them.

Inside the 12 godowns sprawled across the property, more vehicles are being serviced. A breakdown vehicle delivers yet another wrecked car.

Mr Mark Okumu, the CEO of Haji Motors, started repairing cars from his home in 2002, with Sh100,000 in capital saved from his accounting job.

“I operated from home for a while and as orders increased, I moved to Kijabe Street where I had six employees. We used to repair two vehicles in a month.”

As the business grew, the need for cash to expand became more urgent and the company started scouring for financiers, with little success.

Just before he gave up, Fina Bank, an SME-focused financial institution came to the rescue.

The bank has since remained a partner of the business.

To date, Haji Motors has received loans amounting to a total of Sh12 million from the bank, part of which it is still servicing.

The company specialises in the repair of cars involved in car accidents, from minor repairs to rectifying severe damages.

“We became successful once insurance companies recognised the quality of our work. A large proportion of our business now comes from insurance companies,” Okumu said.

According to 2008 statistics released by Kenya Association of Insurers (AKI), private motor vehicles had the highest net claims of Sh4.5 billion against net premiums of Sh5.4 billion, representing a loss ratio of 83.5 per cent.

Rapid growth has seen the company move from its Kijabe Street outpost to its current premises located behind Vision Plaza that were previously owned by Hyundai Motors Kenya.

It now employs 48 technical staff that carry out mechanical and other repair-related jobs like spray painting.

The company also employs six people in their administration department.

Haji Motors now services an average of 100 cars in a month and its revenues have risen to Sh10 million per month.