How Sh1bn vehicle dealership firm grew from a garage
Stantech Motors CEO Titus Ntuchiu at his Nairobi office. Stantech capitalises on ongoing government projects to increase business. PHOTO | DIANA NGILA
What you need to know:
The company now sells saloon cars, pick-ups, buses, trucks, tippers and prime movers under the Cherry, JMC, Sinotruck, and Grand Tiger brands which it sells exclusively.
Vehicle dealer Stantech Motors, a company founded by Kenyan investors, has recorded rapid growth on the back of increased demand for cargo transport in the regional market.
Started as a garage in Nairobi’s Industrial Area in 1997, Stantech has transformed into a fully-fledged distributor of several motor vehicle franchises.
The company previously participated in the Top 100 competition –run by the Business Daily and KPMG— which recognises businesses with annual turnover of between Sh70 million and Sh1 billion.
Stantech outgrew this classification in 2012 when its sales topped the Sh1 billion mark. Last year, the company’s sales stood at Sh1.3 billion, reflecting its rapid growth over the years.
“Our focus is on providing competitively priced vehicles and quality after-sales service to our customers,” said Titus Ntuchiu, Stantech’s chief executive.
The company now sells saloon cars, pick-ups, buses, trucks, tippers and prime movers under the Cherry, JMC, Sinotruck, and Grand Tiger brands which it sells exclusively. The franchises were acquired from 2008, with the latest being Sinotruck that came last year.
“We are now able to serve all sectors of the economy with our various vehicles,” Mr Ntuchiu said.
He added that the government’s increased spending on infrastructure projects, including the Standard Gauge Railway, had created more demand for heavy commercial vehicles such as tippers and trucks.
Most of the vehicles sold by Stantech are manufactured by Chinese multinationals that are riding on relatively lower prices to grow their market share. Chinese vehicles have also become popular in the local market, partly due to their pricing advantage over those from by Europe or North America.
Stantech is one of the major beneficiaries of the rising demand for Chinese vehicles, including from the government which buys about a quarter of all new vehicles sold in the local market. The company, for instance, supplied 426 units of Cherry Tiggo saloon cars and Grand Tiger utility vehicles to the police service between 2012 and 2013.
Besides selling and servicing vehicles under its franchises, Stantech also offers maintenance and repair services to customers owning vehicles sold by other manufacturers. This non-discrimination policy has expanded its client base in terms of after-sales service where it sells parts and charges fees for fixing mechanical problems.
Stantech is one of the few indigenous firms in the competitive new vehicle market that has attracted a lot of players in the past few years. Mr Ntuchiu said the firm had Mombasa, Nakuru, Kisumu, Nyeri, Eldoret, kakamega, and kericho offices through appointed dealers. The company plans to open new branches in Kilifi and Kisii through partners.
The expansion comes at a time when the overall new vehicle market is gearing up for higher sales riding on higher economic growth, government-backed projects and higher disposable incomes among Kenya’s rich and upper middle class households.
Dealers sold more than 18,000 units last year –a record— after factoring in sales of firms like Stantech that are yet to publish their figures under the Kenya Motor Industry Association.
