Scania to acquire Nairobi company
The dash for regional motor vehicle industry has intensified after Scania Group announced its intention to acquire a Nairobi-based firm.
The move by the Swedish firm to take over Kenya Grange Vehicle is expected to ease its entry into a hyped market that has already caught the eyes of foreign car manufacturers.
“Notice is given under the Transfer of Businesses Act of the laws of Kenya…will be transferred to Scania…” read a gazette notice published on 24th January.
Kenya Grange is the sole franchise holder for Scania trucks and buses and provides range of back up services including dependable parts supply, comprehensive service and repair support, fleet management systems as well as driver and mechanic training.
Scania has a presence in more than 100 countries and has about than 30,000 employees. The Kenya business runs under Scania East Africa Limited.
It joined the local market in 1987 in Industrial Area, before widening its presence in Nakuru and Mombasa.
Sales of commercial and public transport vehicles such as pick-ups, trucks and buses accounts for 40 per cent of the industry, buoyed by increased demand in sectors such public transport, haulage and agriculture.
The buses and trucks business in Kenya is dominated by established players such as CMC, General Motors, Simba Colt and DT Dobie.
Over the past two years, global firms have shown interest in putting assembly plants in Kenya because of the tax incentives, and the regional growing economy.
Apart from AVA, there is the Foton plant Kenya Vehicle Manufacturers and the GMEA plants which produced a total of 5,456 units in the 10 months to October 2012, representing more than half of total new vehicle sales.