Home East Africa Mass Layoffs Follow CMC Motors’ Closure in Kenya After 40-Year Run

East Africa

Mass Layoffs Follow CMC Motors’ Closure in Kenya After 40-Year Run

January 20, 2025

(3 Minutes Read)

CMC Motors Group has announced its decision to cease all operations in Kenya and two other countries, which will result in mass job losses. The Group announced its decision on Friday, January 17, 2025, to gradually wind down operations in Kenya, Tanzania, and Uganda in full compliance with local regulations and distributorship agreements, ending over 40 years of business in the region.

According to CMC, the decision follows a thorough evaluation of the business considering sustained market challenges. This decision follows a thorough review of the industry in light of sustained market challenges, including economic pressures, currency depreciation, and rising operational costs,” read part of the statement.

The company owned by CMC Holdings Ltd and acquired by the Al-Futtaim Group in 2014, explained that over the past 40 years, it has played a vital role in supporting East Africa’s agricultural sector. This is through the delivery of quality service, mechanisation solutions, and steadfast support to its customers.

However, the company said that despite restructuring efforts and a transformation program initiated in 2023, the market conditions have not provided a sustainable path forward. The company has announced that it is committed to supporting its employees during this transition and will ensure a smooth and orderly wind-down in adherence to all relevant agreements and regulations.

The notice by CMC Motors also comes just after the end of 2024 which was a year of mixed fortunes for businesses operating in Kenya, marked by economic uncertainties, shifting consumer trends, and a challenging regulatory environment. Several companies, local and international, made the tough decision to exit the Kenyan market, shut down operations entirely or announced mass redundancies.

The British American Tobacco (BAT) Kenya back in December 2024 announced a restructuring plan that will result in job losses. In an internal memo sent to all employees, BAT Kenya’s management issued an update on the simplification of its Nairobi manufacturing factory operations, warning that it will result in a staff reduction exercise.

In Kenya, CMC Motors started vehicle manufacturing in 1976 with the first car rolling off the assembly line in August 1976. Cumulative production since inception stands at approximately more than 60,000 cars, according to its website. The plant was originally designed to produce light and heavy commercial cars including Land Rovers, Range Rovers, Volkswagen Microbuses, Leyland trucks and Buses. The car model range produced also included Nissan Series, Mazda, Nissan Diesel (UD), Jaguar, MAN, Mercedes and Iveco.