Time flies with great content! Renew in to keep enjoying all our premium content.
Prime
Kenya Toyota dealer buys out Michelin’s stake in tyre firm
Cfao Mobility Managing Director Arvinder Reel (right) and Cfao Paris Head of Tyres Department Jacques Olivier get a feel of Michelin tyres during the announcement of the acquisition of Tyre Distribution Africa Ltd (TYDIA) on January 24, 2025 at the Mercedes Benz Showroom along Lusaka Road, Nairobi.
Photo credit: Francis Nderitu | Nation Media Group
Toyota dealer CFAO Mobility Kenya has bought out Michelin stake in Tyre Distribution Africa (Tydia) Limited at undisclosed price, deepening its stake in the distribution business.
CFAO and Michelin founded Tydia in 2019 as a joint venture for distributing tyres, with CFAO taking 51 percent stake. Now Michelin has ceded its 49 percent stake to CFAO, making it the sole official distributor of Michelin and BF Goodrich tyres in East Africa.
The two firms are set to make the announcement Friday morning at CFA’s Mercedes Benz Showroom along Lusaka Road. The deal looks set to expand CFAO’s current network of 36 branches, dealerships, and service centers across the country.
The firm is the distributor and service provider of Toyota, Yamaha motorcycles, Volkswagen, Suzuki, Mercedes Benz, Hino Hyundai light trucks and Sinotruk. CFAO also provides additional services under its pre-owned vehicle brand Automark, Autofast service centers and Winpart —spare and service parts brand.
The deal with Michelin is part of CFAO’s strategic expansion into new markets, leveraging synergies and footprint advantages, and enhancing the distribution network to reap the economies of scale.
Official data shows Kenya has witnessed a doubling of registered motor vehicles in the past 10 years to close 2023 at 4.78 million vehicles compared with 2.21 million in 2014, making the market attractive for parts including tyres.
One of CFAO’s biggest competitors in the tyre business is AutoXpress, which imports, distributes and sells tyre brands like Goodyear, motor vehicle parts and accessories across Kenya, Tanzania, Rwanda, Uganda and Zambia.
CFAO now distributes three different tyres —Michelin, BF Goodrich and Tigar— all which come in different ranges to fit lower, middle and upper class customers. Michelin is a French tyre manufacturer while BF is a US tyre company. Tiger is a Serbian tyre manufacturer, which is also owned by Michelin.
European and US tyre manufacturers enjoyed a monopoly in Kenya and many African markets but this has been disrupted by Chinese and other Asian brands given many price-sensitive customers many who prefer low-priced brands.
CFAO started partnering with Michelin, BF Goodrich and Tigar as part of the revenue diversification strategy that involves covering the entire value chain— imports, wholesale, retail, logistics, and production.
Mid last year, CFAO got approval from the Competition Authority of Kenya to increase its stake in Thika-based assembler, Kenya Vehicle Manufacturers (KVM), to 98 percent from 32.5 percent. The deal was estimated at Sh1 billion.
The KVM deal diluted Kenya government’s 35 percent stake and CMC Holding’s 32.5 percent share, giving the Toyota deal control of the production process.
CFAO, born out of the merger of former Toyota Kenya and DT Dobie, has been upping competition for its top rivals Isuzu East Africa and Simba Corp that control their assembly plants, showrooms and service centres.