CMC Motors has today 17th January, 2025 announced plans to gradually down scale operations in East Africa (Kenya, Uganda and Tanzania) with an aim of eventually ceasing operations in the three countries. The Motor dealer has cited economic pressures, currency depreciation, and rising operational costs as part of the reasons why it decided to cease operations in East Africa.
“CMC Motors Group has announced its decision to gradually wind down operations in Kenya, Tanzania, and Uganda in full compliance with local regulations and distributorship agreements. This decision follows a thorough evaluation of the business in light of sustained market challenges, including economic pressures, currency depreciation, and rising operational costs.” read part of the statement.
“Over the past 40 years, CMC Motors Group has played a vital role in supporting East Africa’s agricultural sector through the delivery of quality service, mechanization solutions, and steadfast support to its customers. However, despite restructuring efforts and a transformation program initiated in 2023, the market conditions have not provided a sustainable path forward. The company is committed to supporting its employees during this transition and will ensure a smooth and orderly wind-down in adherence to all relevant agreements and regulations.” read another part of the statement.
The Company has not however stated when it expects to cease operations.
CMC Motors Group Business Reorganization
This exit news comes barely two (2) years after CMC Motors Group on 24th April, 2023 announced its new and refocused business strategy focusing on agriculture mechanization. The Company stated that it decided to focus on agriculture in an effort to align itself with the Government’s agenda to transform and rapidly grow the agricultural’s sector.
Still in April 2023, CMC Motors Group announced that it would declare 169 employees redundant thereby laying them off. In a letter to the Secretary General of the Amalgamated Union of Kenya Metal Workers, CMC Motors stated that the reorganization would result in a reduction of roles and resources required to execute the remaining functions, and as such, the redundancy was necessary.
The Company also stated that the redundancy was issued in accordance with Section 40 of the Employment Act and that the affected employees would be paid their terminal dues in accordance with their contracts of employment and as guided by the existing Collective Bargain Agreement (CBA).
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