Iveco returns to Kenya market with Sh2.3bn assembly plant

Kenya Redcross boss Abbas Gullet receives the keys for an Iveco car from the Italian Ambassador to Kenya Paola Imperiale. FILE PHOTO | NMG 

By VICTOR JUMA

More by this Author

Summary

• The Italian automaker’s prime movers were last sold by CMC Holdings, with the Italian brand missing from the Kenyan market for years.
• The return of Iveco signals increased competition among formal dealers who are increasingly focusing on the commercial vehicles segment that has emerged as the fastest-selling and most lucrative.

Turin-based Iveco has returned to Kenya through Global Motors Centre which is building a Sh2.3 billion assembly plant in Mombasa to produce the Italian automaker’s range of commercial vehicle brands.
Iveco’s prime movers were last sold by CMC Holdings, with the Italian brand missing from the Kenyan market for years.

Peugeot dealer Urysia in 2015 told the Business Daily it had acquired the Iveco dealership. But the agreement appears to have fallen through, leading to the appointment of Global Motors as the new local distributor.

“We are the exclusive franchise holder for Iveco in Kenya,” Hussein Abadi, the chief executive of Global Motors, said.

“We are about to complete an assembly plant in Mombasa at a cost of Sh2.3 billion.”

The factory, said Mr Abadi, will create some 500 new jobs and will be commissioned by June.

Global Motors will deal in a wide range of Iveco brands, including pick-ups, vans, buses, trucks and prime movers.

The return of Iveco signals increased competition among formal dealers who are increasingly focusing on the commercial vehicles segment that has emerged as the fastest-selling and most lucrative.

Pick-ups, vans, buses and trucks accounted for more than 75 per cent of total annual new vehicle sales, according to data from Kenya Motor Industry Association (KMI).

More dealers have been attracted to the commercial vehicle market, challenging General Motors East Africa (GMEA), which has dominated this segment for years.

Toyota Kenya, for instance, introduced the Hino brand of buses in early 2013 to reduce its reliance on passenger cars, pick-ups and utility models.
The new assembly plant for Iveco marks increased interest by global automakers in the Kenyan market.

French automaker Peugeot S.A. is set to start local assembly of its brands later this year in a venture that is being spearheaded by its local partner Urysia.

German automaker Volkswagen started local assembly of its passenger car —the Polo Vivo — last year under its local franchise holder DT Dobie.

Local assemblers benefit from the 25 per cent import duty waiver on imports of completely knocked down (CKD) parts, giving them a price advantage over imports of fully-built vehicles.