Thursday, February 14, 2013
Honda Gains Foothold In Kenya To Tap E Africa Car Market
TOKYO (Nikkei)--Honda Motor Co. (7267) has begun selling cars in Kenya through a partnership with a local dealership firm and plans to use this low-risk business model to expand into Tanzania and other East African countries.
The Japanese carmaker has joined forces with Dubai-based TransAfrica Motors Ltd., which has operations in Kenya's four major cities. Its dealerships there have begun carrying the low-priced compact hatchback Brio, imported from India, as well as the CR-V sport utility vehicle and Accord sedan, supplied from Japan, among other models.
Honda sees Kenya, with its emerging middle class, as a springboard for a broader expansion in East Africa. It has yet to establish a presence in these countries, where the car markets are still small compared with other parts of Africa.
The automaker opened an office in Kenya in 2012 to conduct market research, but it does not have a sales base there. Instead, its South African subsidiary will provide marketing support for the Kenyan dealerships.
Honda sold 13,373 cars in Africa in 2012, up 10% from the previous year but only half its 2007 tally. The firm marketed cars in Kenya with a different partner until around four years ago, but ended that relationship due to sluggish sales.
(The Nikkei Business Daily, Feb. 14 edition)