Peugeot returns with Sh1bn war chest

The new Urysia showroom and service centre on Bunyala Road, Nairobi. The auto dealer that has been selling Peugeot vehicles in the country is planning to venture into the lucrative commercial and luxury car markets. Photo/Diana Ngila 

By VICTOR JUMA

Posted  Thursday, April 25   2013 

IN SUMMARY

• Urysia, which has been selling Peugeot-branded saloon cars, is set to venture in the lucrative commercial and luxury segments.
• The company has sold 210 saloon cars since it launched operations in 2012, including the Peugeot 308 and 408 models, giving it a market share of two per cent.

Peugeot vehicles have made a major comeback after the new dealer invested Sh1 billion in a national network and new models to gain market share.

Urysia, which acquired the franchise fromMarshalls East Africa, has built a new showroom and service centre on a six-acre plot along Nairobi’s Bunyala Road, adding to its showroom in the city centre.

It is also planning to open outlets in Mombasa, Nakuru, Meru, Eldoret and Kisumu, and introduce new Peugeot vehicles targeting companies and Kenya’s growing middle class.

The investments are part of the French auto maker’s plan to grow sales in emerging economies to compensate for a chronically weak European market and reclaim the dominance associated with brand in the 1980’s.

Urysia, which has been selling Peugeot-branded saloon cars, is set to venture in the lucrative commercial and luxury segments in the next twelve months.

“There are great opportunities for the Peugeot brand from the rising middle class and increased foreign investment in the country,” said Claude Mwende, the CEO of Urysia who previously headed Marshalls.

“We want to restore Peugeot’s lost glory by mid next year,” he said.

Urysia is betting on the heritage of the Peugeot brand to rev up sales, with the French vehicles having been sold in the country for more than three decades.

Urysia has sold 210 saloon cars since it launched operations in 2012, including the Peugeot 308 and 408 models, giving it a market share of two per cent.

(Read: Peugeot roars again with new 508 model)

Its latest Peugeot 508 model —priced at between Sh5 million and Sh7.5 million — has sold 30 units, marking the company’s entry into the luxury segment that is dominated by DT Dobie’s Mercedes cars.

Urysia will also introduce two other luxury models, including Peugeot RCC, and other models like sports utility vehicles, a minibus and pick-ups, giving it a presence in most of the segments in the new vehicle market.

General Motors East Africa and Toyota Kenya are the dominant players in the pick-ups category while sales of vans and minibuses are split broadly among several dealers including DT Dobie.

Mr Mwende said Urysia is exploring the possibility of taking on new franchises, adding that the company has been approached by several global vehicle manufacturers seeking new partners.

“We have been approached for dealership opportunities by European and Asian vehicle manufacturers,” Mr Mwende said.

“We are currently focusing on Peugeot and we will be interested in expanding our franchises later on,” he added.

Franchise owners have become increasingly restless with their current partners, fuelling dealership coups. The latest one is Jaguar Land Rover (JLR)’s decision to transfer its dealership from CMC Holdings to rival RMA Group.

Simba Corporation also took over the Mahindra franchise from Oriel Ltd last year, marking its second dealership takeover after acquiring the BMW franchise from Mashariki Motors in 2008.

Urysia is focusing on demand from individuals and private companies after demand from the government — which buys a quarter of all new vehicles — has been hit by austerity measures.

Urysia’s expansion plans come at a time when new vehicle sales have slowed down significantly. Data from the Kenya Motor Industry (KMI) shows that new auto dealers sold 2,791 units in the three months to March compared to 2,735 units a year earlier.

Dealers attribute the flat sales to customers delaying their purchases since December as they awaited the outcome of the election.

vjuma@ke.nationmedia.co
m