At least two rival dealers are considering acquiring troubled Mobius Motors Kenya Limited, offering the prospect of rescuing the company’s brand.
The startup, which had an ambition of building a Kenyan car brand before switching to assemble the BJ40 model of China’s BAIC Motor Corporation in 2021 under its Mobius brand, announced on Tuesday that it was going into a voluntary liquidation.
Sources in the automotive industry said two rival dealers that sell multiple brands are looking at the possibility of buying out Mobius in bankruptcy, potentially acquiring its assets at a bargain.
“We have been talking to them (dealers) and others in recent months but nothing concrete yet.”
Investments, Trade and Industry PS Abubakar Hassan Abubakar on Wednesday announced on social media that he and Kenya Association of Manufacturers chief executive Antony Mwangi had visited the management of Mobius in the wake of the liquidation news.
“We explored corporate recovery, restructuring, and rescue mechanisms that can be exploited in such circumstances,” he wrote.
It remains to be seen whether a potential government intervention will avert the proposed liquidation which Mobius’ shareholders approved on August 5, 2024.
Mobius has an assembly plant at Sameer Africa’s industrial property off Nairobi’s Enterprise Road in the Industrial Area. At the peak, the company’s sales would amount to about eight units per month.
A dealer interested in buying Mobius will be looking at the potential to grow its product range in the sports utility vehicle (SUV) market as well as using the company’s assembly facility for producing other models.
Acquiring Mobius can also open the door for an expanded distributorship agreement with BAIC Motor Corporation. The Mobius III, a more refined SUV compared to its predecessors, is a locally-branded version of the Chinese multinational’s BAIC BJ40 model.
The Mobius III was retailing for $43,000 (Sh5.5 million), promising to offer stiff competition against imported and locally assembled SUVs.
Most new SUVs sold in Kenya, including Land Rover Defender and Toyota Land Cruiser Prado are retailing at more than Sh6 million.
Toyota Rush, priced below Sh5 million, is among the few more affordable new SUVs. In general, Toyota models are the most popular vehicles across new and second-hand units, partly due to their reputation for reliability.
It was not immediately clear how many Mobius cars have been sold since inception as the company does not report its sales like other new vehicle dealers.
Demand came exclusively from individuals and private firms. Mobius did not benefit from government orders which are critical for supporting the formal dealers, accounting for more than a quarter of annual sales.
Toyota Land Cruiser 79 (used mostly by security agencies) and Isuzu pick-ups and Volkswagen Tiguan are among the models that have dominated sales to the government in recent years through a mix of outright purchase and leasing.
Mobius had also taken steps to supply the government but its financial problems derailed the plan.
The collapse of Mobius comes at a time when dealers are keen to expand their franchises in a market where having multiple brands is seen as key in driving sales.
Mobius ran out of funds in its path to profitability, leading to the liquidation. Its shareholders balked at injecting additional capital and new investors could not be signed up, the company said.
Founded in 2011 by British entrepreneur Joel Jackson, the company attracted key backers, including Playfair Capital, Chandaria Industries and DFC, a US government development corporation.
The investors had helped the startup raise about $56 million (Sh7.2 billion) in funding over five rounds, which proved inadequate to sustain its operations, leaving its showroom empty.
The launch of Mobius III in 2021 came after earlier prototypes failed to gain traction.
The company entered the market with Mobius I in 2011 as the first vehicle to be built by local welders and mechanics. It would soon follow up with Mobius II in 2015, pushing to leave a mark in a market saturated with cheaper, second-hand imports from Asian countries.
Critics said the two earlier models were too basic, lacking the refinement and features that established automakers offer their clients.
