Toyota Motor Corporation is planning to acquire a 50% share in a local truck and bus assembly plant in Kenya.
The automaker is taking this step as it aims to position itself as the top seller of new vehicles in the country, by establishing a presence in the heavy motor vehicle segment, Auto Business News reported.
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The company said it would acquire half of Associated Vehicle Assemblers (AVA), to assemble Hino trucks and buses locally.
“We plan to buy 50 per cent shares, upgrade and expand the plant. We are finalising the talks today with the firm,” Denis Awori, the chairman of Toyota Kenya, told the local Business Daily.
Toyota has been heavy in the saloon car market, a move that saw General Motors East Africa (GMEA) – which is dominant in the bus and commercial truck market – overtake it as the top seller last year.
But Toyota has since overtaken General Motors based on sales for the five months to May with a 25.3% stake compared to its rival’s 21.2% and the deal to buy the AVA stake will intensify the battle for market share between the two firms, the report said.
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By GlobalDataToyota specialises in selling cars and this exposed the company to the negative effects of the global economic recession and the 2008 post-election violence that saw a major decline in new car orders from individuals and corporate Kenya in 2009 and part of last year.
It lost its top position for the first time last year to GMEA, which was riding on strong demand for buses in the public transport sector, where 14-seater vans are being phased out in favour of buses, and higher demand for trucks.
Kenya new car sales are also affected by sales of used imports and parallel imported models.
