How A Series Of Roadblocks Brought Kenya’s Mobius Motors To A Halt
Kenya’s homegrown automotive venture, Mobius Motors, has ground to a halt, succumbing to the harsh realities of the African automotive market. The company, renowned for its rugged, low-cost SUVs tailored to the continent’s challenging roads, announced its intention to liquidate on August 5, 2024.
Founded in 2010 by British entrepreneur Joel Jackson, Mobius was a pioneer in the African automotive space, targeting SMEs in infrastructure, agribusiness and supplies operating in remote areas. Its core proposition was simple yet ambitious: to produce durable, affordable vehicles for a market underserved by traditional automakers. The company’s initial model, launched in 2014, was priced at a competitive KES 1.3 M, roughly half the cost of a second-hand imported SUV.
“The business could not sustain itself. There were some challenges,” a shareholder told Reuters. The company grappled with a myriad of issues, including tax hikes in Kenya that eroded its profit margins, as revealed by the shareholder. Despite considering a relocation to circumvent these challenges, the logistical hurdles proved insurmountable.
Mobius secured a substantial USD 56 M in funding over five rounds, attracting investors such as Playfair Capital, Chandaria Industries, and the US government’s DFC. This financial backing enabled the company to produce subsequent models, including the Mobius II and Mobius III. However, these efforts failed to gain significant traction in a market saturated with cheaper, second-hand imports from Japan, the UK, and other Asian countries.
“The company’s production was tied to pre-orders with a refundable deposit of USD 384.00 (KES 50 K), which could mean the uptake of its models was low in the market,” noted one report. This suggests that consumer demand for Mobius vehicles may have been weaker than anticipated.
The company’s financial health deteriorated rapidly. By 2020, Mobius was saddled with a KES 649.2 M debt and a shareholder deficit of KES 389.1 M. These mounting financial pressures ultimately led to the decision to liquidate.
Mobius’ demise is a significant setback for Kenya’s automotive industry. The company’s failure to compete effectively against established players highlights the challenges faced by local automakers in Africa. While the continent boasts a growing middle class and expanding economies, the dominance of second-hand imports remains a formidable obstacle.
The liquidation of Mobius also raises questions about the future of its customers. With the company winding down operations, the availability of spare parts and after-sales support for existing Mobius vehicles becomes a pressing concern.
As creditors prepare to meet on August 15 to vote on the voluntary liquidation, the full implications of Mobius’ collapse will become clearer. The automotive industry in Kenya, and perhaps Africa as a whole, will be watching closely.
