In a recent interview at our offices with a dynamic young chief executive in the automotive industry, Enterprise gained valuable insights into the challenges, skills required, and joys of running a successful car imports business.
Khalif Kairo is a 26-year-old who has turned his passion for cars and planes into a thriving enterprise.
Kairo started as a broker immediately after high school, bridging the gap between car buyers and sellers for quick money.
After gaining experience in different car dealerships, he co-founded Imports By Kairo, a popular premium car dealership. He exited this venture in 2022 and launched Kai & Karo, a car dealership that has fast gained popularity in Kenya’s car scene.
Diverse skill set
According to Kairo, entering the car imports business requires a diverse skill set. Firstly, a keen eye for market trends and a deep understanding of the global automotive industry are essential. Networking and negotiation skills are also crucial for establishing partnerships with international suppliers and distributors.
“You need to be very honest. It’s a money-intensive business, and there’s a lot of money changing hands. Hard work, too, is integral. Sometimes, you will advertise 100 cars and only sell five,” says Kairo.
He emphasises the use of digital technology to boost sales, stating that salesmen and dealers alike can harness the power of creativity and social media to effectively advertise cars and find prospective buyers.
Financial aspects and profits
Kairo disclosed that he initially invested a significant amount of personal savings into the business. However, he notes that there is no definite amount that one can make from running a car dealership.
“We put in a lot of money in designing and running the Kai & Karo website, but within the first two months, we had already made it back. However, in this business, the money you earn is directly proportional to how you run the business. Some people prefer selling high-end cars and making large chunks of money from fewer sales, while others prefer selling fast-moving cars but making smaller margins from each sale.”
He advises that people looking to start a car dealership must identify their target market and the kind of cars they’re looking to sell. A niche will help clients identify the dealership quickly.
When importing cars, Kairo looks towards different countries based on the type of cars being sold. “If I’m getting a high-end luxury brand, I will look towards the United Kingdom since the prices are more favorable there. For very popular daily-use vehicles, I will look towards Japan. It’s important to note that different countries have different consumer habits.”
Kairo points out that high taxes on imported cars are a bottleneck to the success of car dealership businesses in Kenya. He notes that with higher taxes, there is a high possibility of increased tax evasion, which adversely affects the industry. He suggests that the government should engage car dealers to create frameworks that make the operating environment more friendly for dealerships.
Earlier in July, Kenyan car purchasers faced a 35 percent import duty, which was authorized by the East African Community (EAC) in response to Kenya’s request for an increase in duty under the common external tariff. The adjustment, raising the import duty from 25 percent to 35 percent, became effective on July 1, after the approval by the EAC Council of Ministers.
Passion for the business
Kairo’s passion for the car imports business stems from his genuine love for cars and the thrill of connecting customers with their dream vehicles. He finds great satisfaction in providing high-quality cars that suit diverse preferences and budgets.
Advice for first-time importers
Kairo emphasizes the importance of doing due diligence when importing a car. He warns about the presence of rogue dealers masquerading as import assistants with websites, aimed at defrauding unsuspecting customers. He insists that clients should engage trusted dealers with prerequisite experience to handle all the processes required for importing a new car.