Companies

DT Dobie, CFAO Motors merged in restructuring

toyota-showroom

A CFAO Motors Kenya showroom in Nairobi. FILE PHOTO | NMG

Motor vehicle dealers DT Dobie and CFAO Motors Kenya (the seller of Toyota models) have merged their operations in a process that has resulted in job cuts as the combined business seeks to increase efficiencies and grow market share.

The companies have been operating independently for a decade despite their common ownership.

Japanese conglomerate Toyota Tsusho Corporation (TTC) acquired trading firm CFAO Group in December 2012, taking over its many subsidiaries in Africa including DT Dobie.

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TTC already owned Toyota Kenya (recently renamed CFAO Motors) separately ahead of the buyout.

The motor vehicle dealerships in Kenya have now been merged to operate as CFAO Motors, with the former Toyota Kenya serving as the corporate head office and remaining with the business of selling its namesake Japanese vehicles including Prado models as well as Yamaha motorcycles.

It has relinquished the Hino trucks and Suzuki passenger car dealership to the operations of what was formerly DT Dobie, expanding its multi-brand portfolio that includes Volkswagen and Mercedes.

“Now [one of] the largest automotive distributorship in the market, CFAO Motors Kenya brings together the expertise, resources and capabilities of these two respected brands, to provide a wider range of high-quality vehicles and services to customers in Kenya,” the company said in a statement.

“CFAO Motors will now offer an even more diverse range of premium vehicles, including luxury cars, SUVs, trucks and commercial vehicles, from leading global brands.”

A source familiar with the matter said the merger has resulted in an unspecified number of job losses, with the terminations occurring last month.

The merged entity will have a market share of nearly 30 percent, according to data from the Kenya Motor Vehicle Industry Association (KMIA).

This will make it the second-largest dealer by unit sales after Isuzu East Africa which has a 44.7 percent market share.

CFAO Motors (the former Toyota Kenya) sold 3,084 units last year, giving it a 23.1 percent stake in the overall new vehicle market.

DT Dobie on the other hand sold 772 units, earning a 5.8 percent market share.

Read: New vehicle dealers sales drop 14pc on prices surge

The changes at CFAO Motors are the latest major development in the new vehicle market after rival CMC Motors announced it is exiting the passenger vehicle business to focus on agricultural equipment.

The decision will see it relinquish the Ford and Mazda dealerships to rivals.

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