CMC motors shuts down operations in East Africa after 40 years
CMC Motors Group has announced its decision to shut down operations in East Africa (Kenya, Tanzania and Uganda)
CMC Motors Group has announced its decision to shut down operations in East Africa (Kenya, Tanzania and Uganda).
In a statement on Friday, January 17, the company, which has had a presence in Kenya, Tanzania, and Uganda for over 40 years, cited persistent market challenges as the main reason for its exit.
The company explained that it arrived at the decision after a thorough evaluation of its business performance in the region.
“CMC Motors Group has announced its decision to gradually wind down operations in Kenya, Tanzania, and Uganda in full compliance with local regulations and distributorship agreements.
“This decision follows a thorough evaluation of the business in light of sustained market challenges, including economic pressures, currency depreciation, and rising operational costs,” the statement read in part.
CMC Motors Group noted that despite restructuring efforts initiated in 2023, the market conditions have not provided a sustainable path forward.
“Over the past 40 years, CMC Motors Group has played a vital role in supporting East Africa’s agricultural sector through the delivery of quality service, mechanization solutions, and steadfast support to its customers.
“However, despite restructuring efforts and a transformation program initiated in 2023, the market conditions have not provided a sustainable path forward,” the statement further read.
The company stated that it is committed to supporting its employees during the transition period.
“The company is committed to supporting its employees during this transition and will ensure a smooth and orderly wind-down in adherence to all relevant agreements and regulations,” the statement concluded.
The decision to cease operations marks the end of an era for a brand that has been deeply intertwined with East Africa’s economic and agricultural development.
CMC Motors Group is owned by CMC Holdings Ltd, which was acquired by the Al-Futtaim Group in 2014.
Other trading subsidiaries under the group include Cooper Motor Corporation (Uganda) Ltd., Hughes Motors (Tanzania) Ltd. and Kenya Vehicle Manufacturers Ltd.
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CMC Motors Group joins a group of multinational companies that have exited the Kenyan market for various reasons.
They include GlaxoSmithKline (GSK) which ceased its commercial operations in Kenya in 2023 after over six decades.
This decision was part of a broader strategy to shift to a distributor-led model for supplying medicines and vaccines, outsourcing these functions to third-party distributors.
Others are De La Rue which suspended its banknote printing operations in Kenya due to reduced demand and a challenging economic environment and Nestlé which exited the Kenyan market due to a challenging business environment characterized by high operational costs, increased competition from local brands, and regulatory hurdles.
Cadbury also ceased all manufacturing operations in Kenya, retaining only marketing and distribution functions.
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