Simba Corp targets used car dealers with Sh1m new Renault

Simba Corporation is taking on Kenyan second-hand car dealers with the planned launch of a Sh1 million entry-level new Renault car dubbed ‘Kwid’ next month.

The motor dealer, which holds Renault distributorship franchises, said it is eyeing first-time car buyers and the burgeoning middle class which largely relies on imported used cars from Japan which are deemed cheaper than new vehicles.

Simba is banking on Kwid, which went on sale in India last month, to grow sales and win a bigger market share of the saloon car segment currently dominated by second-hand imports whose prices can be as low as Sh700,000.

The 1.6-litre Maruti Suzuki Ciaz, sold by CMC Holdings, is currently believed to the cheapest new car in Kenya at a price of Sh2.5 million. “We want to take on the mitumba vehicle market with a new car which is cheaper and has warranty. This is a game changer,” Simba Corp executive director Dinesh Kotecha told the Business Daily in an interview.

“The target market is newly employed persons and first-time car owners,” he said.

Mr Kotecha said buyers of the Indian-built Kwid vehicle will enjoy a three-year warranty or 100,000 kilometres and access car repair, parts and accessories at the dealer’s countrywide outlets. Simba is the licensed dealer for six vehicle brands including Renault, Mitsubishi, BMW, Mahindra, Geely and SAME tractors.

The car has an 800cc engine and a fuel consumption rate of 25.17 kilometres per litre, according to data from French carmaker Renault.

It currently retails at a showroom price of 256,968 rupees (S95,730) in New Delhi, India. Mr Kotecha said the car will come at a price of Sh1 million inclusive of VAT, making the Kwid almost at par with used saloon cars.

Toyotsu Automart, a second-hand car dealer, for example, quotes the price of a 2011 Toyota Corolla with a mileage of 111,665km at Sh1.07 million and a 2008 Toyota Fielder with similar mileage at Sh1.29 million. Kenya imports more than 7,000 units of cars every month, 80 per cent of them from Japan.

New vehicle sales grew by nearly a fifth to hit 15,101 units in the nine months to September compared to 13,060 units a year earlier, according to statistics from the Kenya Motor Industry Association (KMI).

Hdavid@ke.nationmediacom

SOURCE: BUSINESS DAILY