Thailand-based RMA Group earned Sh550 million from the recent sale of its Jaguar Land Rover (JLR) franchise in Kenya to London-based Inchcape Plc, sources familiar with the transaction told the Business Daily.
The deal value is one of the smallest in the country’s new vehicle market, reflecting the fact that RMA Kenya did not hold significant assets beyond its brand, stock of cars and ongoing business.
“Inchcape bought out RMA for upwards of $5.5 million (Sh550 million),” one of the sources said.
CMC Holdings was acquired at one of the highest valuations of Sh7.5 billion in 2014 by Dubai-based conglomerate Al-Futtaim Group. The price factored in the Ford and Suzuki dealer’s land holdings in Nairobi and other major towns.
The price paid for other deals in the industry have not been disclosed. Japanese conglomerate Toyota Tsusho Corporation, which owns Toyota Kenya, in 2013 acquired Kenya’s DT Dobie and CICA Motors for an undisclosed sum as part of the buyout of their parent company CFAO Group.
Businessman Mohamed Zubedi earlier this year sold his 49 per cent stake in Crown Motors, the local Nissan dealership, to South Africa’s Motus Holdings for an undisclosed amount.
The deals have firmed the grip of foreign multinationals on the local new vehicle market.
RMA exited the local market after five years, having taken over the JLR franchise from CMC Holdings in 2013.
Inchcape is set to follow up the RMA buyout with the impending takeover of the BMW franchise from Bavaria Auto, a subsidiary of Simba Corporation.
The UK multinational will now have the biggest market share in the new luxury car market, placing it ahead of rivals DT Dobie which sells Mercedes models and Porsche Centre Nairobi.
Unit sales of BMW, Jaguar and Land Rover models stood at 74 or 54 per cent of the total 137 sold in the industry in the half year ended June, indicating the market share Inchcape will inherit.
The high-end car dealers have benefited from increased demand from companies and high-net-worth individuals who are increasingly looking for distinct, high-priced models.