Six auto firms on shortlist for Sh2.5b police lease deal

Six auto dealers are on the short list for a Sh2.5 billion leasing contract to supply the Police Service with 1,200 utility vehicles and saloon cars.

Toyota Kenya, Ecta Kenya which sells Subaru cars, supplier of Peugeot Urysia, Land Rover dealers RMA Kenya, General Motors East Africa and CMC are the shortlisted firms for the tender that is reportedly set to be awarded by the Treasury in the coming weeks.
Documents seen by the Business Daily indicate that General Motors, RMA, and CMC are battling to supply vehicles worth Sh732 million. The government is considering leasing 150 units from either RMA or CMC who are shortlisted for the supply of Land Rover and Ford franchises respectively.
RMA put in a higher bid of Sh2.9 million per unit, valuing its potential contract at Sh443.8 million. CMC had a lower quote of Sh2.7 million per unit, placing its potential deal at Sh405.3 million. It remains to be seen who between the two dealers will be picked based on multiple factors including cost and ability to deliver and maintain the vehicles.
CMC is also competing against General Motors for the supply of another 150 cars, underlining the tight competition for the leasing deals that have become a key driver of sales for dealers in the new vehicle market.
General Motors—which deals in the Isuzu brand— placed a lower quote of Sh2.18 million per unit which values its potential deal at Sh327 million. CMC’s was slightly higher at Sh2.19 million each, placing its potential contract at Sh329.8 million.
Only RMA, CMC, and GMEA are competing for the respective units, with the remaining dealers having no rivals in the categories for which they qualified.

Toyota Kenya appears clear to supply a total of 500 units at a total cost of Sh949.5 million. This will be a boon for the Japanese company, which won the first and exclusive government leasing contract last year, supplying 1,100 units to the police for an estimated Sh3 billion. Ecta, which sells Subaru cars, is the only firm shortlisted to lease a total of 100 units at a cost of Sh256.6 million.
Urysia, the new Peugeot dealer, is clear to supply a total of 300 units at a total cost of Sh631.1 million. This marks a big break for Urysia which started operations last year, bringing back the Peugeot franchise which Marshalls East Africa lost in 2007.
Treasury is expected to issue another tender to lease 1,500 units for the police service in the near term, bringing the total units to be procured in the current fiscal year to 2,700 units.
Leasing allows a client to use a vehicle for a fixed period of time while paying monthly fees as the dealer takes care of maintenance.

This helps users of the leased cars to avoid the upfront costs they would otherwise incur if they opt to buy vehicles.

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