The recent closure of Mobius Motors, Kenya’s only home-grown car manufacturer, after 13 years of operation, underscores the challenging business environment in the country. The company, which specialized in building rugged vehicles suited for African roads, cited mounting debts and an ongoing tax dispute with the Kenya Revenue Authority (KRA) as primary reasons for its shutdown. Mobius’s directors decided to liquidate the company to settle debts and distribute any remaining assets to shareholders.

Mobius Motors was founded in 2011 with the vision of producing affordable and durable vehicles tailored to the local market. Despite initial success and investor interest, Mobius struggled to compete with more advanced global automakers like Toyota and Volkswagen. These companies, with their established brands and economies of scale, dominated the market with superior technology and extensive product lines. Additionally, Mobius faced financial challenges exacerbated by a significant tax demand from KRA and stiff competition from the importation of cheaper used cars from Japan, which further limited their market share​.

The shutdown of Mobius Motors highlights broader issues within the Kenyan business landscape, particularly regarding the ease of doing business and the tax regime. Many local companies face similar challenges, making it difficult for them to thrive. The decline in sales within the automotive sector further indicates a tough operating environment for businesses in Kenya, calling for urgent reforms to enhance business viability and competitiveness​.

References:

The Standard Mobius car maker shuts down after 13 years amid mounting debts, tax dispute

The Star End of the road for Kenya’s only home grown car

Reuters Kenya’s Mobius, maker of rugged cars for African roads, calls it a day

Business Daily Mobius shuts down after 13-year journey

Nation End of an era as Mobius shuts down after 13-year drive