Simba Motors wins deal to sell Renault cars in 7 countries

Simba Corporation has signed a lucrative franchise deal to sell French car maker Renault’s vehicles in Kenya and in six other African markets, adding to the auto dealer’s growing portfolio of distributorships.

Simba, the seller of Mitsubishi trucks, will distribute Renault in a joint venture with Portuguese conglomerate Grupo Salvador Caetano SA. The 50:50 partners will trade under the name Simba Corp.

It will start selling the Renault cars in Kenya in September and later open dealerships in Tanzania, Uganda, Malawi, Mozambique, Zambia, and Zimbabwe.

“We are in a joint venture with Grupo Salvador. Each partner owns half of the equity and we will be selling Renault cars in seven markets,” said Dinesh Kotecha, a director at Simba Corporation.

The new franchise deal comes after DT Dobie and its affiliates in other countries lost the distribution rights of Renault and Nissan brands after they were bought out by Toyota in December 2012.

READ: DT Dobie loses Renault after Toyota buyout

Mr Kotecha declined to reveal the capital expenditure plans for the new dealership but said the partners would invest in a new showroom, service centre, and sales force for the Renault brand.

The cross-border deal marks yet another expansion push for Renault in the auto market.

The company this year started selling Chinese car brand Geely, giving it a presence in the budget passenger car market dominated by Toyota Kenya.

In 2012, it acquired the Mahindra SUV and pick-up dealership from Oriel Limited, part of Ecta Group of companies.

This followed its takeover of the luxury BMW franchise from Mashariki Motors in 2008, making Simba the top beneficiary of dissatisfied global car manufacturers in Kenya’s new vehicle market.

Sources in the industry told the Business Daily that Simba is also in the race to acquire the Nissan SUV and pick-up dealership, competing against rivals such as RMA Kenya that are also keen to bag the popular brand.

A total of 1,140 units of Nissan vehicles were sold last year under DT Dobie, accounting for eight per cent of unit sales in the new vehicle market.

DT Dobie lost the Nissan and Renault brands after it was acquired together with CICA Motors in December 2012 by Toyota as part of a Sh274.4 billion Pan-African deal involving their parent firm CFAO.

It is this deal that spooked the franchise owners, Renault Nissan Alliance (RNA), prompting it to terminate its distributorship agreements with DT Dobie and start a search for new partners.

RNA has appointed South Africa’s Imperial Group as its main Nissan distributor in the region, with the conglomerate said to be scouting for a local partner to form a joint venture similar to the one signed by Simba for Renault cars.

The brand owners appointed Grupo Salvador to run the Renault dealerships in Africa, with the new distributor opting to partner with Simba.

The Portuguese conglomerate distributes a wide range of vehicle brands in its home market, Spain, Angola, Cape Verde, England and Germany including Renault, Mercedes, Audi, Ford, Honda, and Peugeot.

It is also engaged in contract manufacturing for Toyota, producing brands such as the Corolla, Corona, Starlet, Land Cruiser and Hilux.

The Renault dealership has raised Simba’s motor vehicle brands to six, with the firm betting on its expanding portfolio to grow its market share that stood at 17 per cent in the first quarter.

DT Dobie last year sold 27 units of Renault saloon cars and Simba is seeking to grow sales of the French brand that is relatively new in the Kenyan market, gaining an entry in a field dominated by Toyota Kenya.