Kenya's Mobius, Rugged Car Maker for African Roads, Shuts Down

Kenya's Mobius Motors, renowned for manufacturing durable vehicles tailored for African terrain, has announced its closure. The company, which aimed to provide affordable and robust transportation solutions for the continent, has ceased operations. This decision marks the end of an innovative chapter in Africa's automotive industry, leaving questions about the future of affordable, rugged vehicles for challenging road conditions. The shutdown highlights the difficulties faced by automotive startups in the region.

Kenya's Mobius Motors, which began producing rugged, low-cost SUVs designed for African roads a decade ago, has decided to cease operations due to financial difficulties, according to a company statement and a source from its shareholders on Tuesday.

Mobius was founded by a London-born investor who experienced Africa's rough roads while working for a forestry company in Kenya. The source told Reuters that increased taxes in East Africa rendered the business model unsustainable.

"The business could not sustain itself. There were some challenges," said the source, requesting anonymity.

The owners considered relocating production to another country, but logistical challenges in moving the assembly line from Nairobi led them to reject the idea, the shareholder added.

Mobius initially produced a basic, no-frills SUV aimed at African consumers with modest budgets, priced at 1.3 million Kenyan shillings, roughly $13,000 at the time and about half the cost of an imported second-hand SUV.

The company later introduced updated editions with additional features.

Mobius, backed by investors including Britain's Playfair Capital, was part of an initiative by investors and African governments to create jobs through local vehicle manufacturing. This group included Uganda's Kiira Motors, Ghana's Kantanka, and Nigeria's Innoson Motors.

Meanwhile, global automakers like Japan's Toyota Motor Corp and Germany's Volkswagen AG also increased their investments in markets such as Kenya and Rwanda to capitalize on growing economies and rising consumer demand.

However, all faced similar challenges: intense competition from imported second-hand vehicles.

Creditors will meet on August 15 to vote on voluntary liquidation, as stated by the company, which is not publicly listed, in a newspaper announcement.

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Source: Reuters‍