CMC Motors Group, a titan in the region’s automotive and agricultural sectors, has announced the gradual winding down of its operations in Uganda, Kenya, and Tanzania.
The closure signals the end of a 40-year legacy that saw the company as a pivotal player in the mechanization of East Africa’s agriculture, along with its role in providing high-end automotive solutions. The company’s recent statement, issued on January 17, revealed that market conditions were no longer conducive to securing a profitable future, marking the unfortunate conclusion of a once-promising era.
For decades, CMC Motors had been synonymous with East Africa’s economic growth, offering state-of-the-art machinery that empowered farmers across the region. But as market pressures mounted—highlighted by soaring operational costs, a devaluing currency, and an increasingly hostile economic environment—the company found itself in a tough spot. A detailed review of its business strategy led to the inevitable conclusion: it could no longer sustain itself in the region.
The announcement echoed through the markets, with many recalling the company’s rise to prominence, particularly under the ownership of Dubai’s Al-Futtaim Group.
In 2014, CMC Motors had been acquired by Al-Futtaim Auto & Machinery for a staggering Kshs 7.5 billion, offering much-needed relief after years of internal turmoil, marked by boardroom disputes and allegations of financial misconduct.
Investors, including prominent figures like Peter Muthoka and Paul Ndung’u, saw the buyout as a golden ticket, pocketing billions from the deal. However, this fortune would be short-lived. Despite the high valuation—68.8 times the company’s reported net profit—Al-Futtaim found itself grappling with unforeseen financial challenges as the African markets evolved in unpredictable ways.
CMC Motors had long been a beacon of automotive variety in East Africa, boasting a diverse portfolio that included renowned brands like Jaguar, Land Rover, Ford, and Volkswagen. However, internal conflicts led to the collapse of these partnerships.
Competitors like Inchcape Kenya and CFAO Mobility swiftly capitalized on CMC’s loss, stepping in to claim market share left behind by the once-dominant player. Even as these shifts occurred, the company maintained a focus on agricultural mechanization, offering solutions like the iconic New Holland tractors. But despite their reputation, the shift away from passenger vehicles wasn’t enough to counter the broader economic challenges that lay ahead.
The company’s exit from the passenger vehicle market in 2023, coupled with the layoff of 169 employees and the liquidation of remaining inventory under the Ford, Mazda, and Suzuki brands, painted a bleak picture. These steps, taken in a desperate bid to streamline operations, ultimately proved insufficient against the wider economic headwinds. With the agricultural sector no longer enough to sustain the business, CMC was left with little choice but to scale back its operations, leaving behind a trail of unanswered questions.
The restructuring efforts, which began with the “transformation initiative” launched in 2023, ultimately faltered. The initiative, aimed at revitalizing CMC Motors and reasserting its place as a leader in agricultural machinery, failed to provide a sustainable solution for the long term. The once-sturdy foundation on which CMC had built its East African legacy now appeared to be crumbling.
Adding to the uncertainty, the company’s real estate holdings—prime plots of land in Nairobi—remain an asset shrouded in mystery. It is unclear whether Al-Futtaim has identified potential buyers for these assets, or whether they, too, will be left to the whims of an unpredictable market.
But beyond the business implications, CMC Motors’ exit will leave a lasting impact on East Africa’s agricultural sector. For years, CMC has been the unsung hero for many farmers, providing essential machinery that allowed them to cultivate land more efficiently and improve productivity.
The company’s departure creates a void that will be difficult to fill. Farmers across the region will undoubtedly feel the loss of a long-time partner who provided not just machinery, but dependable service and support.
While the CMC Motors Group’s story may be drawing to a close in East Africa, its legacy remains a mixed one.
The company was once a force that bridged industries, spurred innovation, and supported agriculture. However, in the end, it fell victim to the very challenges it once helped others overcome.
For East Africa, the departure of CMC Motors marks the end of an era—an era where a global automotive giant once tried, and ultimately failed, to thrive in a region filled with promise yet haunted by unpredictable volatility.
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