New vehicles are not a preserve of the rich, says high-end car dealer
By Wainaina Wambu | August 24th 2021
Chris Ndala, the new DT Dobie managing director, is fully conscious of the luxurious weight attached to the car dealer.
He hopes that the local assembly of the “people’s car” – the Volkswagen (VW) – will see more Kenyans troop to his showroom as new vehicles become affordable.
“It’s a product that’s well-positioned in the market and thanks to the automotive policy in Kenya, we are able to assemble these vehicles locally and the rebates/incentives that we get from the government are passed on to the end-users,” said Mr Ndala.
For the first six months of the year, DT Dobie has sold 138 VW units, an increase of 23 units compared to a similar period last year, figures from the Kenya Motor Industry Association (KMIA) show.
The vehicles range from just under Sh2 million to Sh5.5 million and include the Polo Vivo, Caddy Kombi van, Toureg and Tiguan lines.
As the local official Volkswagen dealer since 2014, DT Dobie also sells the VW Passat, favoured by top parastatals, and the Amarok, a high-end pick-up truck.
But can perceptions change? Ndala points out that as a “solutions provider” they have something for every customer’s budget.
“They always associate DT Dobie with class. We have different segments in Mercedes targeting different people,” he said
But he’s quick to point out that one cannot buy some Mercedes models while struggling with rent or school fees.
“When I say you need to buy the GLS (a luxury SUV), you shouldn’t have a school fee or rent problem… so when you’re done with school fees or with paying your mortgage, you say it’s my me-time… that’s the person buys the GLS,” said Ndala.
“Driving a Mercedes is basically a sense of achievement; you want to drive with a sense of pride.”
But how are Kenyans paying for their luxury cars? Do people come with a truckload of cash?
“We are getting less and less of those (cash). A majority of sales is financing through lenders,” he said.
Owning a “German machine” means a lot for many Kenyans, with people attaching value to brands such as the Mercedes.
Enthusiast and classic owner clubs have been rising over the years. Financial Standard spotted a rare 1960s W110 “Fintail” Mercedes being restored at the DT Dobie workshop.
“Mercedes never dies,” said Ndala who drives the GLE, a mid-size luxury SUV.
With such classy cars, owners tend to handle them with care, which partly explains their durability.
Ndala himself admits that he wouldn’t let anyone snack inside his car. The first six months as DT Dobie boss have been a roller coaster. Over the period, he’s been struck by Covid-19 as he adjusted to a new country and seen vehicle sales drop almost ten per cent.
The iconic car seller, established in 1949, is shaking off the pandemic blues and its luxury brands, including the Mercedes Benz, are picking up.
“We’ve managed to maintain our market share, which is six per cent on the passenger side. There was a drop in the luxury segment, attributed to the pandemic as people cut spending,” said Ndala, who relocated from Liberia where he was Managing Director of CFAO Liberia. French firm CFAO owns DT Dobie Kenya.
He said Mercedes sales in Kenya tend to pick up after June following the reading of the national Budget.
And the brand has been given a boost by the trucks segment, with DT Dobie selling 85 units this year alone.
DT Dobie is also the authorised dealer for Hyundai trucks in the country.
The new MP5 Mercedes Benz Actros 3342 truck, for example, has been modified for the diesel sold in East Africa and the conditions of local roads.
The overall new car market has recovered, rising 33 per cent in the half-year to June this year compared to a similar period last year.
Ndala noted that the growth to 6,158 units has been spurred by buses and trucks. In five years’ time, the government plans to phase out the importation of second-hand vehicles in a radical shift meant to spur the growth of locally assembled vehicles.
This is part of a raft of measures to streamline the motor assembly sector contained in the National Automotive Policy drafted by the Ministry of Industrialisation.
Government data notes that second-hand car models make up more than 85 per cent of the imported Fully Built Units (FBUs) in Kenya, with the bulk coming from Japan.
This means that the majority of Mercedes Benz vehicles, such as the C Class popular on Kenyan roads, are from the used car market.
Is there a way to reduce the market share of used cars?
“It’s a big topic because it requires regulations and policies, which should be discussed regionally and even in the African Union (AU),” said Ndala.
“Kenya is on the right path. Let’s start by limiting the age of what should come into the market, and that shouldn’t just be a slogan, you have to apply that because shutting those used car dealers is impossible.”
He further observed that some of the policies need to be relooked at and include a broader discussion on the manufacturing of parts locally.
“The policymakers should involve us the assemblers to understand what we want because it’s a good thing if we produce more locally as it will create employment for our people and we’ll be able to make the car cheaper,” said Ndala.
This, he added, would then determine the market size and the local assemblers would do more volumes.
Ndala said because of fuel quality, there are some countries that are not allowed to import certain vehicle models.
The reduction of the age limit will also see cleaner cars with fewer emissions on Kenyan roads.
However, he noted that it’s a long road for Africa as the new car market develops.
“Kenya has improved a lot in terms of finance. The only issue is that sometimes that process takes long unlike in certain markets where you just walk into a showroom and within an hour, the application is done so we just need to have a system that can fast-track that system,” said Ndala.
He explained that cheap is expensive, and Kenyans have no reason to fear buying new cars.
The MD said some of the advantages of buying a new car include aftersale services and affordability.
“Look at the cost of ownership because the car comes with a warranty of three years for a warranty of 100,000km,” he said.
“For us, the relationship starts with the delivery, we don’t tell you goodbye at the gate. In fact, that’s when we start talking.”
The soft-spoken Ndala, who started out as a certified mechanic and engineer, said his career has run full circle.
“I always say that I’m living my dream life because I’m managing a product that I’ve worked on, touched, felt and understand,” he said.
He specialised in electronics and did a lot of intensive training in Japan.
He was responsible for CKD (completely knocked down) logistics assembly between France and South Africa while working as the regional manager for Renault Trucks based in Johannesburg
He doesn’t rule out new products in the future depending on the market analysis.
DT Dobie lost the Nissan franchise in 2014 after Toyota Tsusho Corporation (TTC), the trading arm of Toyota Group, acquired a majority stake in French firm CFAO, which owns DT Dobie.
This took away about half of DT Dobie’s business. It is said that Nissan feared that its fellow Japanese carmaker Toyota would prioritise the sale and marketing of its vehicles
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