Motor vehicle dealer CMC Motors has lost its mainstay Ford franchise to rival Salvador Caetano which will start selling the American brand of pick-ups and sports utility vehicles in July.
This marks the latest franchise loss for CMC under the ownership of Dubai-based multinational Al-Futtaim Group which in 2014 acquired the company for Sh7.5 billion after it had been paralysed by internal wars pitting its main shareholders.
The dealer, which previously boasted a portfolio of vehicle brands, has, for instance, ceded the Jaguar Land Rover and Volkswagen franchises to Inchcape Kenya (the successor of RMA Kenya) and DT Dobie respectively.
It also lost the exclusive dealership of Suzuki cars in 2018 when CFAO Motors (then trading as Toyota Kenya) was appointed as the second representative of the Japanese automaker.
“Ford Motor Company is proud to announce the appointment of Salvador Caetano as the new distributor-partner, selling and servicing Ford vehicles in Kenya and Uganda, with operations to become effective on July 1st, 2023; this follows the end of the prior contract with CMC Motors,” the American vehicle manufacturer said in a statement.
The agreement will add to Caetano’s existing dealership in Renault, Hyundai and Kia cars in the Kenyan market. The Renault truck business was also taken over by CMC last year.
Ford said that the deal is a logical expansion of its partnership with Caetano in the West African market, adding the newly appointed dealer is ready to invest more to grow its market share in Kenya and Uganda.
Salvador Caetano already represents Ford in Tunisia, Senegal, Angola, Gambia, Guinea Conakry, Mauritania, Liberia, and Cape Verde.
“Salvador Caetano has demonstrated a willingness to invest and exploit all available opportunities, as it strives to improve the Ford customer experience in both Kenya and Uganda,” Ford said.
CMC will now be left to rely on the Mazda and New Holland tractors franchise as the key parts of its remaining businesses, with Ford having accounted for 78.7 percent of its total vehicle sales last year, according to industry data.
The company sold 388 units of Ford pick-ups and sports utility vehicles in the year ended December 2022, representing a 13.1 percent growth from 343 units a year earlier.
Data from the Kenya Motor Industry Association, however, shows the company’s sales of American vehicles have more than halved from highs of 927 units in 2015.
CMC has described the recent departures of global automakers as the outcome of deliberate strategic decisions it has taken to restructure the business.
The exit of Ford continues the musical chairs seen in Kenya’s new vehicle market where automakers are constantly reviewing their existing franchisees.
The upheavals come at a time when new vehicle sales have been falling, trailing the recent peak of 19,253 units set in 2015.