Making a Car for Africa
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Business FRIDAY, DECEMBER 5, 2014 UK house Back to basics: Making a car for Africa prices rise at Kenya’s Mobius strips extras to keep it cheap, reliable NAIROBI: On the edge of Kenya’s capital, two doors down from a gleam- preneur, Joel Jackson, a Briton, who saw a niche for such a car when work- slowest rate ing display of Germany’s luxury Porsche cars, another showroom offers ing in rural Kenya in 2009. The company could make two vehicles a day at Africa’s answer to the continent’s potholed roads.It’s called the Mobius. It its existing plant and plans other versions including one with four-wheel in 9 months has no flashy dials, alloy wheels or electric windows. In fact it has no win- drive. dows at all except for the front windshield. Instead, the square car-cum- LONDON: British house price growth pickup with its aluminium panels has been stripped of extras to make it NEW ENTRANT slowed again in the three months to sturdy and cheap. “We are not trying to reinvent the wheel, we are just try- Mobius is not the only aspiring car producer in east Africa. In neighbor- November as prices rose by 8.2 percent ing to make ... one that is a bit tougher,” says sales manager Aman Ghai in ing Uganda, the Kiira Motor Project - soon to be a corporation - aims to compared with the same period last year, the showroom, where engineers are also at work. produce between 300 and 840 saloons and other models a year from mid- their smallest increase since February, mort- Mobius Motors hopes to succeed where many others have failed: 2018, all designed and produced locally. gage lender Halifax said yesterday. In designing, building and selling a product in Africa, which has long provid- Unlike Mobius, Kiira plans to target mainly office workers or executives. November alone, prices rose 0.4 percent, ed the raw materials to feed the world’s factories but struggled to create a The basic petrol model will cost about $20,000, Musasizi said, adding it recovering from a 0.4 percent fall in manufacturing base at home. Mobius faces prodigious challenges, not would be in a similar class to a vehicle like a Toyota Camry. “The citizens of October, Halifax said. Economists had least a popular perception that Africa can’t produce a quality product on east Africa deserve the right to own premium automotive products made expected prices to rise by 8.0 percent and its own. in east Africa,” Paul Isaac Musasizi, chief innovation and technology officer, 0.3 percent, according to a Reuters poll. The It has also had to weave through government bureaucracy, a perennial told Reuters by telephone. Kiira has an initial commitment from the gov- Bank of England has welcomed signs that complaint for businesses. Many companies resort to slipping bribes to ernment worth $70 million. It will need a total of $350 million to build an Britain’s housing market is cooling off after truculent officials to ease the way. Mobius, which says it has a “zero toler- assembly plant on land it now has, Musasizi said, and is looking for a glob- double-digit price gains earlier this year, ance” policy on corruption, believes neither obstacle is insurmountable - al partner. restrained at least in part by new controls evidenced by the fact it believes it will have government approvals to The Mobius II model, designed in Kenya, will have about 45 percent on mortgage lending. The annual price deliver the first vehicles on Dec 11. Fifty cars are being built in the first local content, although the engine and some other parts are imported, a gains measured by the Halifax index peaked batch, each selling at 950,000 shillings ($10,500) before tax. Starting the practice common in the industry, particularly for new entrants. Kiira this year at 10.2 percent in July. In October, project on African soil also had benefits, enabling the engineering team in engines will also come from abroad. But Africa’s attempts to build its own prices were up 8.8 percent. Kenya to focus on what rural Africans need. The car’s back seats run along cars have a chequered past, illustrated most recently by the fate of the Price growth was likely to slow further in the sides and fold away to create space for goods, while heavy duty sus- Nyayo Pioneer - built in response to the urging of Kenya’s then president, 2015 as the prospect of higher interest rates pension copes with bumpy tracks and minimal electronics mean there is Daniel Arap Moi, to make a car “however ugly or slow it may be”. and the scale of recent gains discouraged less to break down. It rolled off the production line in 1990 but then both car and project some buyers, Halifax said. “The challenge is basically overcoming that fear that Africans can’t stalled. The model never reached mass production. Mobius is aware of the Halifax economists expect prices nation- manufacture,” says Ghai, a Kenyan who worked for foreign dealers in the pitfalls, but has far surpassed that abortive initiative. Enquiries for its vehi- ally increase in a range of 3-5 percent in past. “We have all the resources here. We have the talent pool here. It is cle have come from neighboring states, West Africa and beyond, and the 2015, although a spokeswoman for the just getting over the fear.” Mobius is the brainchild of 29-year-old entre- company says its business model is as sturdy as its car.—Reuters lender said the forecast had been made before the overhaul of taxes on property purchases announced by finance minister George Osborne on Wednesday. Gold eases back ahead of ECB meeting LONDON: Gold retreated yesterday ahead of a European Central Bank meeting that could lead to further monetary stimulus, after the dollar’s rise to two-year highs versus the euro prompted investors to cash in some of the previous day’s gains. The metal held onto the $1,200 an ounce level, however, as consumers in Asia continued to buy and on uncertainty ahead of the ECB meeting and the release of US payrolls data on Friday. Spot gold was down 0.6 percent at $1,201.40 an ounce at 1104 GMT, while US gold futures for December delivery were down $7.00 an ounce at $1,201.70. The euro fell to less than $1.23 for the first time in more than two years on Thursday, finding few friends in a market that is wagering the ECB will be forced to inject even more stimulus into a mori- TOKYO: Money dealers call orders under the foreign exchange rate board at the foreign exchange market in Tokyo yesterday. — AFP bund euro-zone economy. It later steadied, but remained depressed, keeping up pressure on gold.“Generally European easing has played out Euro hits new dollar-low before ECB meeting on gold via a stronger dollar (and) weaker gold prices,” Citi analyst David Wilson said. “(Though) it LONDON: European stock markets rose while the euro hit a two-year low Japan and the United States have done. Falling prices may sound good for seems to me that there is a decent physical floor against the dollar yesterday as the European Central Bank prepared to the consumer, but they can trigger a vicious spiral where businesses and which is going to prevent gold from dipping too announce the outcome of its key policy meeting. The Bank of England was to households delay purchases, throttling demand and causing companies to low.” also give its latest interest-rate decision. Approaching midday in the British lay off workers. Demand from Asian consumers has been firm capital, London’s benchmark FTSE 100 index edged up 0.05 percent to “We have rate verdicts from both the Bank of England and the ECB-no sur- this week. India, the world’s second-biggest con- 6,720.15 points. prises expected at the former but (ECB head) Mario Draghi still has a moun- sumer of the metal, last week scrapped a rule man- Frankfurt’s DAX 30 rose 0.49 percent compared with Wednesday’s close tain to climb in terms of dragging the currency bloc out of its current eco- dating traders to export 20 percent of all gold to 10,020.95 points and the CAC 40 in Paris won 0.41 percent to 4,409.67. The nomic malaise,” said Tony Cross, market analyst at trading group Trustnet imported into the country. After the ECB European single currency sank to $1.2296, the lowest point since August Direct.After pulling back from its low, the euro stood at $1.2315, up from announcement yesterday, then today’s US payrolls 2012, before pulling higher. Asian stock markets closed higher yesterday fol- $1.2308 late in New York on Wednesday. While the euro has been sold ahead data will help investors gauge the strength of the lowing record close overnight on Wall Street, as investors cheered an upbeat of the meeting, expectations are that the ECB will hold fire but signal a move US economic recovery and how it will impact report on the economy from the US central bank. The European Central Bank in the new year. interest rates. “We expect gold to be supported and Bank of England will both announce their latest monetary policy deci- “Even if it does not step up its actions just yet, it will choose language for should the US payroll number disappoint and sions yesterday.