DT Dobie vs Pizza Hut: New economic realities in Kenya

DT Dobie Kenya recently shifted its showroom from Nairobi’s University Way to Mombasa Road.

DT Dobie is the Kenyan subsidiary of CFAO Automotive, a French firm. It has in its stable high-end brands like Mercedes and Jeep. Its showroom was strategically located opposite the main gate of University of Nairobi’s main campus.

The high-end cars were the first things students saw when they left the university gate to head to Nairobi’s central business district (CBD).

These cars inspired students who hoped to drive them once they started working. Compare that with students from other universities who see a maize plantation when they leave their university gates.

Changed dreams

Now that the showroom is gone, it is getting harder to motivate the youngsters. The former DT Dobie showroon is now occupied by fast-food restaurant Pizza Hut. Will students now dream of what to eat instead of what to drive?

It gets sweeter. DT Dobie was selling German cars. Pizza Hut is an American conglomerate selling fast food. Does this reflect the rising fortunes of American firms?

American cars are on the road, with Jeep, Ford and Chrysler now competing with Toyota and Honda.

Does the location outside the gate of one of Kenya’s premier universities illustrate American determination to capture the hearts of Kenyan consumers when young?

The departure of DT Dobie from University Way is more than just the closing of a showroom. It marks the new reality in Kenya’s economy. It was very symbolic; it is another question if the owners thought about it like this.

Some could argue, in whispers, that the showroom shift is a clear indicator the auto industry does not consider the graduates of this university and other public universities as future customers of high-end cars.

That might be borne from economic realities. The scarcity of jobs and competition have lowered the chances of a graduate buying a high-end car. We have more universities and more graduates — and my gut tells me high-end students are shifting to private universities.

Does the location of the fast-food restaurant mean, symbolically, that students are more concerned about bread-and-butter matters than high-end luxury?

Pizza Hut shows America’s thrust into the food and beverage industry. Coca-Cola has been around, and is now joined by Subway and KFC, with more likely to come. We did not just like the US’ constitution, but its food, too.

Why the focus on food? Economists will quickly inform you that food is very inelastic — you eat whether prices go up or down. Contrast this with cars, whose prices are generally very sensitive.

We must, however, admit that high-end cars are closer to food in elasticity. Their buyers are not that sensitive to prices. Is it logical to argue, purely from an economic perspective, that Pizza Hut was a logical replacement for DT Dobie?

Exotic factor

The exotic factor is likely to drive the food sector, which rarely innovates. Ugali will be always be ugali; githeri and muthokoi cannot be changed. With a sizeable young population little tied to tribal roots, exotic food becomes attractive. ‘Let me buy you a pizza’ sounds cooler than, ‘Let me buy you mukimo’.

University Way should be changed to Universities Way — there is the University of Nairobi, Kenya Methodist University, Masinde Muliro University of Science and Technology, and many others. Pizza Hut sees this market.

DT Dobie’s shift also shows the changes in Kenya’s capital. The CBD is now attracting businesses in food and education. The sale of ICEA Building to a public university is a clear indicator the corporate prestige of the CBD is long gone. Fast-food restaurants and universities are key attractions and are complementary.

High-end activities are shifting to the suburbs. Westlands and Upper Hill have really benefited. Even embassies have been leaving the CBD, and the stock exchange left for Westlands. Interestingly, the Government is likely to remain in the CBD, with Parliament, the High Court and the Office of the President unlikely to shift soon.

This state of influx will continue until the old CBD becomes the historical curiosity it is supposed to be. One hopes that old historical buildings will not be destroyed like those of the Happy Valley.

I envisage lots of tourists walking around, or being driven in open buses, admiring and marveling at the old city.

This is the reality of cities; they are born, grow and die. Luckily, they also give birth. The old CBD gave birth to Westlands, Upper Hill, Mombasa Road and others.

The lifecycles of cities create great economic opportunities. Can you see them or are you just complaining about traffic jams?

The writer is senior lecturer, University of Nairobi.

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