Toyota Kenya sheds jobs as car sales drop by one third

A customer is being served at Toyota Kenya showroom on Uhuru Highway in Nairobi. file photo | nmg
A customer is being served at Toyota Kenya showroom on Uhuru Highway in Nairobi. file photo | nmg 

A steep plunge in sales of new vehicles last year has forced Toyota Kenya to cut nearly a third of its staff and join the growing list of companies that are sending workers home to maintain financial fitness.

Sources familiar with the plan said the Japanese auto dealer is laying off more than 100 of its nearly 600 employees through an early retirement scheme that has been on the cards since February.

Toyota Kenya managing director Sachio Yotsukura said the ongoing job cuts were informed by the changing business environment and a shift to automated operations.

“With growth and development businesses undergo many changes like introduction of new and better systems, digitisation, and improved controls. The need to review the business structure is as a result of this cyclic process,” Mr Yotsukura said in an interview.

He said the Toyota management had decided to offer a voluntary early retirement programme to all its staff.

Toyota’s new vehicle sales, including Hino, trucks fell by a third to 2,778 units last year from 4,151 units in 2015, cutting the firm’s market share slightly to 20 per cent from 20.7 per cent.

Mr Yotsukura said Toyota Kenya had contracted a leading consultancy firm to conduct a business optimisation exercise aimed at making the company more effective and efficient in service delivery.

Kenyan dealers and assemblers saw sales of new units plummet to a four-year low of 13,869 vehicles last year, compared to 19,966 units moved in 2015, a 30.5 per cent drop.

Isuzu East Africa controlled 35 per cent of the sales followed by Toyota, Simba Corp (16.8 per cent), and CMC Motors with 6.9 per cent, according to data from the Kenya Motor Industry Association.

Toyota Kenya, wholly-owned by Tokyo Stock Exchange-listed Toyota Motor Group, is the sole distributor of Toyota vehicles, Yamaha brands and Hino trucks and buses in Kenya.

It also exports some units to other countries in the region.

Models such as Toyota Hiace, Land Cruiser, Hilux pickups as well as Hino trucks and buses are locally assembled at the Mombasa-based Associated Vehicle Assemblers.

Banks top the list of firms which have in the past year retrenched more than 1,000 staff in the wake of interest rate cap law. 

Others are tyre maker Sameer Africa #ticker:FIRE, which closed the Nairobi factory and rendered 600 staff jobless, Kenya Airways #ticker:KQ (1,800), and East Africa Portland Cement #ticker:PORT (1,000).
Coca-Cola East Africa laid off 40 workers last year.