German Tech Firm Targets Kenya Auto Parts Market

German technology and services company Bosch has opened a Kenyan subsidiary targeting middle class car owners, becoming the latest multinational to establish a regional hub in Nairobi.

Uwe Raschke (left), Bosch board member and German ambassador to Kenya Andreas Peschke on Thursday. Photo/Lillian Ochieng’

Uwe Raschke (left), Bosch board member and German ambassador to Kenya Andreas Peschke on Thursday. Photo/Lillian Ochieng’

The Kenyan office, set to be opened in three months, will be based on Mombasa Road.

The company is currently operating from the premises of Hurlingham-based auto service firm Concord Motors, which is an associate of Bosch.

Bosch director for automotive aftermarket division in South Africa and East Africa Ewald Faulstich said the company is targeting the service and spare part market for Kenyan motorists.

“We want to target these workshops with cars aged between two and 20 years, The used car market here is big, and there is a need for affordable and high quality service,” said Mr Faulstich during the official launch of the company’s Kenyan subsidiary.

Bosch’s products have been available in the local market through dealers and auto workshops.

Sales of used cars in Kenya grew by 24.3 per cent on increased demand in 2013, despite of a price increase of 20 per cent on average.

Data from the Kenya National Bureau of Statistics (KNBS) shows that 76,122 units of used vehicles were sold in 2013 compared to 61,233 units the previous year.

The KNBS data shows most of the used vehicles sold were saloon, station wagons for personal use and pick-ups mostly put to commercial use.

Data by the Kenya Motor Industry, a lobby for new cars dealers, showed sales of new cars also went up by 13.1 per cent to 14,542 units last year.

Most of Kenya’s small businesses and the middle class buy second-hand vehicles, which account for more than 80 per cent of all vehicles sold in the country.

The growth potential of the automotive industry has been boosted by an expanding middle class, and also increased demand for buses, pick-ups, and trucks from rising activities in the agriculture, transport and construction sector in the region.

Bosch deals in four different fields including automotive technology, industrial technology, consumer goods and energy/building technology.

The German company will initially focus on East Africa’s automotive, power tools and security systems markets, with the Nairobi office acting as the regional hub.

“We are extremely optimistic about our business prospects in Kenya and in East Africa. In Kenya, the middle class and its purchasing power is rising, and they will look more and more for exceptional goods and services,” said Uwe Raschke, a member of the Bosch board of management in charge of consumer goods.

The company’s revenue from its operations in Africa stood at €350 million (Sh40.6 billion) in 2013, with half of this coming from automotive business. Global sales revenue for the company stood at €46.4 billion (Sh5.4 trillion).

Kenya is the fourth country in Africa where Bosch has a subsidiary office, the others being South Africa, Morocco and Egypt. Mr Raschke said that there are plans to open offices in Nigeria, Algeria, Angola, Mozambique, Ghana and Tunisia.

– Business Daily