What next for the ‘Kenyan Mercedes’ dream after Mobius Motors shutdown?

Kenyan automobile company Mobius Motors is closing down.

The company’s director Nicolas Guibert issued a creditors’ voluntary insolvency notice on Monday, announcing the automaker is going into liquidation.

Liquidation occurs when a company is insolvent – when it cannot pay its debts – and it involves bringing a business to an end and distributing its assets to claimants.

The remaining company assets are used to pay creditors and shareholders based on the priority of their claims.

In the Monday notice, Guibert said the decision to fold Mobius followed a stakeholder meeting earlier in the day.

But this news is not just a blow to the company’s stakeholders but also Kenya at large; Mobius represented a Kenyan dream.

Mobius Motors was founded by British businessman Joel Jackson in 2010 with the vision of creating home-grown SUVs tailored to Kenya’s terrain and selling them at the price of imported ones, which dominate Kenyan roads.

The Nairobi-based company announced its first car, the Mobius I prototype, the following year, albeit to mixed reactions to its stripped-down look.

The automaker would later follow up the flagship car with Mobius II and Mobius III models, spruced-up but still rugged SUVs, priced at Ksh.1.5 million and Ksh 3.9 million respectively as of 2022.

“Our vision was simple; make brand-new cars specifically for the Kenyan and African market at the price of imported ones. We wanted to turn around this market into one of brand-new cars,” Guibert told Citizen TV’s Made In Kenya program last year.

By July 2023, Mobius Motors said it had grown from initially importing car parts and assembling them, to designing and manufacturing units right in Nairobi.

The company said it was working towards another mid-size SUV, which it was manufacturing from scratch.

At the time, Guibert said they had sold over 80 Mobius III units and that they were targeting 200 units each year in Kenya alone.

He however noted that vehicle manufacturing in Kenya was still difficult, especially in the supply chain, pointing to the scarcity of suppliers.

The Mobius director urged the government to incentivise local vehicle manufacturing to boost investment in the sector.

To many Kenyans, Mobius was what an attempt at a 'Made in Kenya' car looked like and even more, what the dream could become if fostered.

President William Ruto alluded to this in April this year when he exuded confidence about Kenya producing a locally made high-quality car similar to the German luxury vehicle maker Mercedes-Benz.

While dismissing people who underestimate locally-made products, Ruto said, “I hear some people tell me sometimes, Mr President, goods manufactured in Kenya are not of very high quality, and I tell them it is better we drive a Datsun made in Kenya than a Rolls-Royce made elsewhere.”

“Slowly, we are going to make our own Mercedes. We will slowly refine ours until we are there.”

Datsun is a now-defunct Japanese automobile manufacturer brand by Nissan, whose modest pick-up trucks were common in Kenya although not locally made. 

Rolls-Royce on the other hand was a British luxury car manufacturer.

Used Japanese imports dominate Kenya’s car market and local new vehicle sales dipped 15 per cent last year, according to data from the Kenya Motor Industry Association. It showed that individuals and businesses bought 11,370 units in 2023, down from 13,352 units sold in 2022.

Dealers attributed the drop to high inflation and the depreciating shilling, which shot up the prices of products as well as production costs.

For now, Guibert has announced that KVSK Sastry will oversee Mobius’s liquidation process and that a list of creditors and proxy forms will be released for inspection on Friday, August 9, at the company’s head office at the Sameer Business Park in Nairobi.

With Mobius’s closure, it remains to be seen whether another carmaker or the e-mobility sector players who have been taking on Kenya’s public transport sector might take up the ‘Kenyan Mercedes’ dream.

While the government has been striving to boost local vehicle assembly, attracting investments from global automakers such as Volkswagen, it has also poured a lot of investment into e-mobility with tax incentives/exemptions and special power tariffs for EV charging.

However, so far, the EV sector companies like Roam Motors, eBee and BasiGo have focused on public transport solutions like buses and motorcycle taxis and not personal cars.

Mobius Motors is shutting down. What does this mean for the ‘Kenyan Mercedes’ dream? pic.twitter.com/aV3ew0IrH0— Citizen TV Kenya (@citizentvkenya) August 7, 2024