Mobius Motors, a Kenya-born vehicle manufacturer known for its rugged, affordable SUVs designed for the African terrain, has announced it will shut down operations under the Insolvency Act. The decision comes after the company faced prolonged financial difficulties, struggling to pay suppliers and employees.
Creditor Meeting Scheduled
According to a notice seen by Techpoint Africa, a meeting with creditors is scheduled for August 15, 2024, at the Mobius Factory in Nairobi. During this meeting, KVSK Sastry is expected to be approved as the liquidator to manage the winding-up process. Mobius Director Nicolas Guibert confirmed the decision, stating that shareholders resolved to place the company under liquidation on August 5, 2024, as per Section 393(1)(b) of the Insolvency Act.
Background and Financial Struggles
Founded by British entrepreneur Joel Jackson, Mobius Motors aimed to provide low-cost, durable vehicles for small and medium-sized enterprises (SMEs) in sectors like infrastructure, agribusiness, and supplies, especially in remote areas requiring robust transportation solutions. Despite raising $56 million over five funding rounds and launching multiple models, including the Mobius I, Mobius II, and Mobius III, the company struggled financially.
Mobius initially garnered attention with its first model, priced at $10,000 (KES 1.3 million), significantly lower than the market prices for standard SUVs in Kenya. However, the company failed to secure a substantial market share, facing stiff competition from imported second-hand vehicles from the UK and Asia. These financial woes led to a high debt profile, ultimately pushing Mobius toward insolvency.
Impact and Implications
The liquidation of Mobius Motors highlights the challenges faced by local manufacturers in the East African automotive market. The shutdown has sparked discussions about the role of government policies in supporting the mobility industry and their broader impact on the Kenyan economy. The Kenyan Insolvency Act 2015 allows companies to voluntarily liquidate if the board resolves that it is the best course of action.
Mobius Motors’ closure underscores the difficulties in competing with established global brands and the persistent challenge of second-hand imports dominating the market. This situation also raises questions about the sustainability of venture capital-backed enterprises in developing economies, particularly those reliant on niche markets.
Conclusion
As Mobius Motors prepares for liquidation, the focus will shift to the upcoming creditors’ meeting and the subsequent actions of the appointed liquidator. The company’s journey from a promising startup to its current state serves as a cautionary tale for other aspiring local manufacturers in Africa.
For more details, you can refer to the original notice on Techpoint Africa.
