Toyota-owned CFAO Motors acquires 98% ownership of Thika-based Kenya Vehicle Manufacturers

Toyota-owned CFAO Motors acquires 98% ownership of Thika-based Kenya Vehicle Manufacturers

• The Competition Authority of Kenya (CAK) has approved CFAO Motors Kenya Limited's acquisition of 98% ownership in Kenya Vehicle Manufacturers Limited (KVM)
• CFAO Motors, a subsidiary of Toyota Tsusho Corporation, will now hold a significant stake in the Thika-based vehicle manufacturer
• The CAK determined that this investment will not negatively impact competition in the market for the assembly and distribution of new motor vehicles

Elijah Ntongai, a journalist at TUKO.co.ke, has more than three years of financial, business, and technology research expertise, providing insights into Kenyan and global trends.

The Competition Authority of Kenya (CAK) has given its approval for CFAO Motors Kenya Limited's proposed investment in Kenya Vehicle Manufacturers Limited (KVM).

This significant investment will see CFAO Motors, a subsidiary of Toyota Tsusho Corporation, acquiring 98% ownership of the Thika-based vehicle manufacturer.

The approval, announced in a detailed CAK decision, comes after careful consideration of the transaction's potential impact on market competition and public interest.

The CAK determined that the investment is unlikely to negatively impact competition in the market for the assembly and distribution of new motor vehicles.

"This approval has been granted on the finding that the transaction is unlikely to negatively impact competition in the market for the assembly and distribution of new motor vehicles, nor elicit negative public interest concerns - two key considerations during merger analysis" said CAK in public notice.

Who owns Kenya Vehicle Manufacturers

The Government of Kenya, CMC Holdings Limited, and CFAO Motors Kenya Limited are among KVM's shareholders.

KVM's primary activities include the manufacture of Semi Knocked-Down (SKD) passenger vehicles and Completely Knocked-Down (CKD) trucks, buses, and truck bodies. Additionally, it engages in special vehicle orders and safari wagon conversions and repairs.

Competition in the motors sector in Kenya

CFAO Motors, holding a 30% market share in new vehicle distribution and KVM with 13.5% in vehicle assembly, will continue to face competition from other industry players.

Associated Vehicle Assemblers Limited (AVA) has the highest market share for motor assembly, at 41.1%, Isuzu has 40.1%, and Transafrica Motors LTD (TAM) has 4.1%.

When it comes to vehicle distribution in Kenya, Isuzu Motors has the biggest market share at 44%, followed by CFAO Motors at 30%. Mitsubishi and TATA have 9% and 6%, respectively, and the other distributors account for 11% of the motor vehicle market.

Kenya introduces electric vehicle assembly in Thika

Earlier on Tuko.co.ke, electric mobility firm BasiGo launched the first-ever Electric Bus assembly line in Kenya.

The company partnered with Kenya Vehicle Manufacturers Limited to set up the assembly wing in Thika.

Speaking during the inaugural launch of the assembly line on Wednesday, April 17, Trade Cabinet Secretary (CS) Rebecca Miano said the move is part of the government's agenda to improve local manufacturing.