Dubai-based auto dealer eyes local second-hand car market

Al-Futtaim group's Director for Corporate Development, Mawrwan Shehadeh, during a media briefing at the Sarova Stanley Hotel on January 31, 2014. Al-Futtaim, the Dubai-based giant seeking to acquire CMC Holdings by February 2014, hinted it will join second-hand car business. PHOTO | DIANA NGILA  NATION MEDIA GROUP

In Summary

• The family-owned conglomerate, which has a presence in over 20 countries, is hoping to convince majority of CMC’s shareholders to accept the Sh13 per share offering before February 14
• Al-Futtaim has valued CMC at Sh7.5 billion ($86.67 million) and will continue running its business under the same name. The remaining brands in CMC’s showrooms are Suzuki, Maruti, Nissan Diesel, Iveco, Eicher, Ford and Volkswagen

By John Njiru
More by this Author

Al-Futtaim, the Dubai-based giant seeking to acquire CMC Holdings by next month, has hinted it will join second-hand car business.

According to its top brass, the auto dealer will also introduce its global flagship brands if it succeeds in the take-over bid.

“A lot of people are importing the second-hand cars in Kenya and they are asking: Are they certified? Are they warranted? Are they genuine? We want to come in and capture all that,” said Al-Futtaim automobile president Len Hunt.

Mr Hunt was speaking in Nairobi while unveiling the firm’s long-term strategy in Kenya on Friday.

The company’s plan may cause jitters in the local second-hand car market which is dominated by small ventures and individuals.

Last year, a total of 222,178 cars were registered most of them second-hand.

Mid-last year, through its Tsusho Capital financial arm, Toyota ventured entered started selling used cars.

It is not clear what car brands Al-Futtaim will start importing but it has been in business deals with Honda and Toyota in the United Arab Emirates and Egypt.

The family-owned conglomerate, which has a presence in over 20 countries, is hoping to convince majority of CMC’s shareholders to accept the Sh13 per share offering before February 14.

“The next two weeks will be critical for us but we are encouraged by events of the past few days. Many shareholders have come forward and agreed to sell their shares,” said Marwan Shehadeh, the group director corporate development.

CMC was suspended from the Nairobi bourse in 2011 after a series of boardroom wrangles when its shares were at Sh13.50.

Al-Futtaim has valued CMC at Sh7.5 billion ($86.67 million) and will continue running its business under the same name. The remaining brands in CMC’s showrooms are Suzuki, Maruti, Nissan Diesel, Iveco, Eicher, Ford and Volkswagen.

It lost its flagship JLR franchise — composed of Land Rover Defender, Jaguar and Range Rover brands.