Caetano takes over Renault truck dealership from CMC

Unveiling of new C range Renault truck in Mombasa by CMC Motors on October 3, 2019. The car dealer has lost the dealership to Caetano Kenya. PHOTO | NMG

CMC Motors has ceded the Renault truck dealership to rival dealer Caetano Kenya, marking the latest franchise transfer in the new vehicles market.

Caetano’s managing director Pedro Campos confirmed to the Business Daily that the company has been appointed as the dealer for Renault trucks by the French automaker after CMC’s contract expired.

“We have taken the entire franchise exclusively effective November and the contract is renewable. There is no specific exit period,” said Mr Campos. This is the latest franchise to be dropped by CMC, which previously boasted the most diverse vehicle brands in the new vehicle market.

The franchises that the company has lost to rivals include Jaguar Land Rover (now by Inchcape). CMC also lost Suzuki cars franchise in 2018 after Toyota Kenya was appointed the second dealer of the Japanese brand. CMC said it decided to drop the Renault truck business as part of a business review.

“CMC took the decision last year to exit the dealer agreement in place with Renault Trucks in November of 2021 as part of an ongoing strategic directional review of the business,” the dealer’s chief executive Alan Crossan said.

“We have worked very closely with Renault Trucks through the 12-month notice period to ensure that our mutual customers were not affected. We have also been working in collaboration with Caetano as they step into the role as the new Renault Trucks dealer from the end of November 2022, once our notice period expires.”

For Caetano, the takeover of the Renault trucks business adds to its contracts for Hyundai, Renault, and KIA. CMC sold a total of 21 Renault trucks in the year ended December 2021, according to data from the Kenya Motor Industry Association.

Caetano is among the small dealers in the formal vehicle market and it has sought to grow sales by venturing into the used-car market.

Its sales of new vehicles stood at 55 units last year, according to KMI data.

Caetano plans to start assembling some of its brands in the local market from next year, seeking to tap tax incentives offered to firms running plans that put together vehicle parts shipped into the country.

Assemblers are exempted from import duty (25 percent) and excise tax (20 percent). A recent exemption from VAT (16 percent) was recently introduced for assemblers of passenger vehicles who can source in the local market worth at least 30 percent of the value of the automobiles.

Editor's note: This article was updated on November 30, 2022 with CMC’s comments and clarification .

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