CMC loses dealership of tractor brand to Toyota

CMC Holdings has lost the exclusive dealership of Case IH tractor brands to rival Toyota Tsusho East Africa.

Toyota was last Friday appointed the new dealer of the Case IH tractors in Kenya, Uganda and Tanzania in a global review by the franchise owner CNH Industrial Group.

CMC, which has been selling Case IH tractors, will now remain with New Holland franchise that also belongs to CNH, which has split the dealership of its regional agricultural machinery unit.

The loss of Case IH tractors adds to the list of exclusive franchises that CMC has lost to rivals including sale of Jaguar, Land Rover and Range Rover brands to RMA Kenya as well as MAN trucks to RT East Africa.

“Case IH has chosen Toyota Tsusho as a key partner because of its commitment to customers, parts availability and service management,” Mr Matthew Foster, the Vice President at Case IH, said in a statement.

The statement added that Toyota will deal in Case agricultural machinery including tractors, combine and sugarcane harvesters. This will add the tractors to Toyota’s product range as the Japanese firm seeks to cut its reliance on the sluggish saloon car market.

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Besides Case, Toyota’s newly established agriculture division will also sell the Yanmar brand.

READ: Toyota enters tractors business to cut reliance on saloon cars

Yanmar tractors are produced by Japan-based Yanmar Company and will target small scale farmers with its relatively smaller diesel engines, while Case tractors and harvesters will cater for large-scale farmers.

The tractor business will put Toyota in a head-to-head battle with CMC Motors, Tata Africa and FMD East Africa.

CMC’s acting CEO Mary Ngige said the company will continue selling Case tractors for an unspecified period before the franchise fully moves to Toyota.

“We will continue selling Holland tractors, which command the largest market share,” said Ms Ngige in a phone interview on Tuesday.

The new shift in CMC’s franchises comes at a time when the company is in the process of being acquired by Dubai-based Al-Futtaim Group in a Sh7.5 billion or Sh13 per share deal.

READ: Al-Futtaim inches closer to CMC takeover target

Al-Futtaim said one of its conditions for the acquisition is an assurance that CMC will retain its franchises after the change of control.

The Dubai firm’s executives told the Business Daily that they were in talks with global vehicle manufacturers such as Ford, who they are keen to work with after the transaction.

“We are going to engage with the franchise owners soon before we conclude the acquisition of CMC,” Yasser Alvi, Al-Futtaim’s head of investments and acquisitions told the Business Daily on Friday.