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East Africa: Subaru Targets Regional Market
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East African Business Week (Kampala)
18 February 2008
Posted to the web 19 February 2008
Cedric Lumiti
Nairobi
Officials from the Japanese auto maker, Subaru, say the company plans to expand its operations in East Africa to lift its market share command.
The company projects a sharp increase in sales after the successful launch of operations in the region given the high population expected to come with it.
Passenger cars recorded a 30% increase sales, reaching a peak at 500 car imports per day between November and December, 2007. Subaru, however, says 3% of this were its car sales.
The luxury car maker says it will also go for regional markets by opening up country shops in Rwanda and Burundi after successfully setting up outlets in Uganda and Tanzania with the head office based in Nairobi. There is already a Subaru showroom in Kampala.
Subaru Kenya CEO Mr. John Troughton, who also presides over the East African region says the company's current one per cent market share could significantly improve with a buoyant East African Community. "This would lessen barriers and allow easy flow of products," he said.
"We have just completed our shop in Dar e salaam which will boost our reach in the region. We are targeting increased sales with strong establishments in the other countries within the region," said Troughton.
In the expansion plan, Subaru Kenya is expected to work in partnership with Subaru Japan, which will mainly provide technical requirements.
Speaking at the launch of the latest model 'Imprezza 2008,' Troughton said the company was keen on the manufacture of high quality and cost effective vehicles for all levels of income earners.
The company has so far launched a campaign to encourage the use of new vehicles as opposed to second hand imports. It is estimated that 80 per cent of car owners in Kenya are second hand owners. There is also a sizeable number of second hand Subaru car owners.
"The new Impreza will compete with other quality family saloons, and as a hatchback it offers all the benefits of both a saloon and a station wagon," said Mr. Dudley Stanner, director of marketing.
In the latest financial estimates last June, the government slapped heavy duty on the importation of second hand vehicles to encourage the purchase of new ones.
"We are keen on ensuring that our customers can afford new cars at low prices. We will be engaging our technical team to offer wide ranging after sales services and advise to customers," Troughton said.
The new model that will retail at Ksh6.5 million in the Kenyan market will target high end customers and comes with enhanced features on safety and low fuel consumption.
Last year Subaru sold some 96 new vehicles in Kenya and project an increase in sales this year despite the charged political atmosphere in the first quarter of the year.
"We intend to raise this figure to about 160 in Kenya this year and also count on the other branch offices to make good sales," added Troughton.
Subaru has been renowned for its domination in World Rally Champions which has been a strong selling point for its products.
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The company however has to grapple with criticism over the high number of accidents mostly fatal involving their vehicles.
The 1500 cc engine model named 'Tribeca' will be coming to the market to wrestle other established high end models like the Hummer.
Subaru Kenya sales and marketing manager Ouko Njega said the company will be targeting both fleet and individual customers in their efforts to expand their market reach.
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| Copyright © 2008 East African Business Week. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
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