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

Kenya's Mobius Motors, which started making rugged, low-priced SUVs designed for Africa's roads a decade ago, has decided to stop operating due to financial challenges, a company statement and a shareholder source said on Tuesday.

Mobius, founded by a London-born investor who experienced the continent's bumpy roads while working for a forestry company in Kenya, found tax hikes in the East African country meant its business model was no longer sustainable, the source at one of the company's shareholders told Reuters.

"The business could not sustain itself. There were challenges," said the source, asking not to be named.

The owners considered moving production to a different country, but the option was rejected due to the logistical challenges of moving the existing assembly line from Nairobi, the shareholder said.

Mobius initially produced a boxy, no-frills SUV designed for the modest budgets of African consumers, going for 1.3m Kenyan shillings, equivalent to about R241,290 at the time and roughly half the price of an imported second-hand SUV.

It later launched updated editions with extra features.

Mobius, whose investors include Britain's Playfair Capital, was part of a push by investors and governments on the continent to create jobs by launching home-grown vehicle manufacturers. They included Uganda's Kiira Motors, Ghana's Kantanka and Nigeria-based Innoson Motors.

At the same time, global carmakers such as Japan's Toyota and Germany's Volkswagen also boosted their investments in markets including Kenya and Rwanda, to tap into growing economies and rising consumer demand.

They all, however, faced the same challenges: stiff competition from second-hand imports from abroad.

Creditors will meet on August 15 to vote on the voluntary liquidation, the company, which was not listed, said in the statement that appeared in newspapers.