Crown Motors, CMC cut jobs as sales drop

What you need to know:

  • Data from the Kenya Motor Industry Association shows that sales continued to fall this year which could turn out to be one of the worst for the dealers.
  • Orders in the half year ended June shrunk 19.8 per cent to 5,738 units, affecting all segments including luxury cars and commercial vehicles.
  • Increased layoffs in the industry are seen as a move by the firms to protect their margins, with payroll expenses ranking among the biggest cost items.

New vehicle dealers CMC and Crown Motors (the seller of Nissan brands) have sacked scores of workers, becoming the latest to shed jobs in an industry hit by a sharp drop in sales.

Sources told the Business Daily that CMC, whose franchises include Ford and Suzuki, has laid off some 160 employees while the extent of Crown’s retrenchment could not be ascertained by the time of going to press. Both companies declined to comment on the retrenchments.

The move comes soon after Toyota Kenya shed an estimated 100 jobs through an early retirement scheme. Sales in the new vehicle market dropped 30.5 per cent to 13,869 units in 2016, a four-year low and marking the first time sales have declined since 2009.

Data from the Kenya Motor Industry Association shows that sales continued to fall this year which could turn out to be one of the worst for the dealers.

Orders in the half year ended June shrunk 19.8 per cent to 5,738 units, affecting all segments including luxury cars and commercial vehicles.

Increased layoffs in the industry are seen as a move by the firms to protect their margins, with payroll expenses ranking among the biggest cost items.

Dealers have blamed the slump on a general business slowdown, the uncertainty brought by the general election and tighter credit markets following the capping of interest rates.

Government orders, through leasing, appear to have also slowed down after boosting the industry with multi-billion shilling deals in recent years.