Why CMC Motors Is Closing Down Operations In Kenya & 2 Countries After 40 Years

After nearly 40 years, CMC Motors Group has announced its exit from Kenya, Uganda, and Tanzania.

In a statement, the company explained its decision, citing economic pressures, currency depreciation, and rising operational costs that have rendered operations unsustainable.

The company explained that it decided after thoroughly evaluating its regional business performance. 

"CMC Motors Group has announced its decision to gradually wind down operations in Kenya, Tanzania, and Uganda in full compliance with local regulations and distributorship agreements. 

"This decision follows a thorough evaluation of the business in light of sustained market challenges, including economic pressures, currency depreciation, and rising operational costs," the statement read in part.

Photo of CMC Motors Group in Kenya. /THE STAR

CMC Motors Group noted that despite restructuring efforts initiated in 2023, the market conditions have not provided a sustainable path forward.

"Over the past 40 years, CMC Motors Group has played a vital role in supporting East Africa’s agricultural sector through the delivery of quality service, mechanization solutions, and steadfast support to its customers. 

"However, despite restructuring efforts and a transformation program initiated in 2023, the market conditions have not provided a sustainable path forward," the statement further read.

The company stated that it is committed to supporting its employees during the transition period. "The company 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 statement concluded.

The decision to cease operations marks the end of an era for a brand that has been deeply intertwined with East Africa’s economic and agricultural development.

CMC Motors Group is owned by CMC Holdings Ltd, which was acquired by the Al-Futtaim Group in 2014. Other trading subsidiaries under the group include Cooper Motor Corporation (Uganda) Ltd., Hughes Motors (Tanzania) Ltd. and Kenya Vehicle Manufacturers Ltd.

Last year, the company retrenched 169 employees following its exit from the passenger vehicle market after clearing stocks of Mazda, Ford, and Suzuki brands. Moving forward, the group plans to focus on the agricultural sector through tractor sales.

In 2022, the company sold 388 Ford pickups and SUVs, marking the end of an era in the East African market.

The company joins other firms that have left the country, ceasing operations over tough economic times, among other reasons.

The recent exodus of global brands from Kenya paints a troubling picture of an economy at a crossroads. Once a beacon of hope for multinational corporations seeking growth in Africa, Kenya now grapples with a challenging business environment in the new year.

This means that millions of Kenyans began the new year jobless, and the wave of exits raises critical questions about Kenya’s business climate.

Read more: Companies That Left Kenya & Closed Down In 2024, Leaving Millions Jobless In 2025

This pattern was similar in 2023. GlaxoSmithKline (GSK) for example ceased its commercial operations in Kenya in 2023 after over 60 years, a decision deemed to be part of a broader strategy to shift to a distributor-led model for supplying medicines and vaccines, outsourcing these functions to third-party distributors.

De La Rue suspended its banknote printing operations in Kenya due to reduced demand and a challenging economic environment while Nestlé exited the Kenyan market due to a challenging business environment characterized by high operational costs, increased competition from local brands, and regulatory hurdles.

Cadbury, famous for its chocolate, also ceased all manufacturing operations in Kenya, retaining only marketing and distribution functions.