LOOKING AFTER PREMIER AUTOMOTIVE PRODUCTS
Kenya’s attractiveness to international luxury brands seeking to establish a foothold in the African market has grown significantly in recent years, owing to the emergence of a sizeable affluent class with refined tastes and preferences.
The country had 3323 High Net Worth Individuals (those with a net worth exceeding US$ 1 million excluding their primary residence) in 2020, and that number is projected to expand significantly by 46% over the next five years, according to the Knight Frank Wealth Report 2021.
This cash-laden class of dollar millionaires comprises of wealthy business magnates, top executives, politicians, doctors, lawyers, and other high earning professionals. Together with other up-and-coming achievers, such as young entrepreneurs and mid-level managers in well-paying corporate jobs, this affluent class is driving strong demand for luxury brands in fashion, property, travel, hospitality, and automobiles.
One international company that is aggressively capitalizing on the growing demand for luxury automobiles in Kenya is Inchcape Kenya, a subsidiary of Inchcape Plc, an independent, multi-brand automotive distributor and retailer with operations in 34 countries across five continents, with employees in excess of 15,000 people. Headquartered in London, U.K., and listed on the London Stock Exchange (LSE), the group has longstanding relationships with some of the world’s leading manufacturers of luxury and premium automobiles, including Jaguar Land Rover, BMW, Mercedes-Benz, Audi, Lexus and Rolls Royce, among dozens of other prestigious names.
The firm provides a route-to-market for both sales and after-sales services for new and pre-owned cars and parts and, according to its Annual Report 2020, reported total turnover of £6.8 billion (approx. Sh1 trillion) last year, despite the debilitating impact of Covid-19 on the performance of the global automotive sector during the period.
In Kenya, its subsidiary, Inchcape Kenya, operates as the official distributor for Jaguar Land Rover, BMW, and BMW Motorrad. The firm operates a state-of-the-art BMW showroom at One Africa in Westlands in Nairobi as well as a state of the art service workshop at Delta Tower Annex, offering customers one convenient physical point of contact for sales and aftersales service. Inchcape Kenya also acts as a hub for 7 other Eastern Central African countries.
With long-term investments in state-of-the-art facilities, expert technicians and first-class customer care, Inchcape’s objective is to create life-long Inchcape customers and service all their aftersales needs – from routine servicing to accident repair. This is a key point of differentiation that not only helps retain customers, but also drive topline and bottom-line growth through service revenue and the sale of accessories and parts.
Led by automotive engineer and seasoned business leader, Hussein Ibrahim, Inchcape Kenya has already registered early successes, despite taking over the BMW franchise and Jaguar Land Rover franchise only three years ago. Inchcape Kenya recorded the highest sales of accessories in sub-Saharan Africa in 2020. Inchcape Kenya won the ‘Best Customer Service’ in the region by Jaguar Land Rover. Inchcape Kenya was also lauded the best outfit in sub-Saharan Africa following a breathtaking relaunch of the legendary Land Rover Defender in 2020, amid the Covid-19 pandemic, underlying the resolve of Inchcape and the new management and marketing team in charge. Inchcape Kenya team won the coveted, ‘Best Launch Concept in sub-Sahara Africa (SSA) award.
The relaunched Land Rover Defender has been voted as the ‘Best Design’ during the 2021 Car Design of the Year award.
“With the premium products that we sell at Inchcape Kenya, customer service is of utmost importance to ensure excellent experiences at the dealerships and with their cars,” says Ibrahim, who was headhunted as the Managing Director of Inchcape Kenya after successful stints in senior roles at Toyotsu Automart (a Toyota Subsidiary) and Subaru Kenya. Hussein Ibrahim, as the MD of Inchcape Kenya, is also in charge of the Inchcape hub that comprises 7 other East African countries, for Jaguar Land Rover, BMW and BMW Motorrad.
One of the important shifts in the luxury automotive market in Kenya is that majority of customers today no longer rely on informal networks to source parts, accessories or get repair and service. Customers understand the frustration that comes after buying parts or getting upgrades and repair from unknown and unauthorized sources only to end up paying more, given the complexity of technology in some of the newer models and the expertise and precision required.
“The importance of servicing at a dealer is a major safety and cost advantage. We cannot over-emphasize enough on the importance of using only genuine parts on our cars, in addition to the availability of highly trained technicians at the dealerships, who are up to date with technical skills and deep knowledge of the emerging technologies used in automobiles,” opines Ibrahim.
Inchcape Kenya’s growth prospects seem favorable, given the projected increase in high-net-worth individuals as well as the younger generation’s growing affinity for luxury brands. Fflur Roberts, Head of Global Luxury Goods at market intelligence firm, Euromonitor International, says that the typical African luxury consumer is significantly younger than the typical luxury consumer in mature markets such as Western Europe, where consumers tend to be in their 50s and 60s. “They (African luxury consumers) are in their late twenties or and early thirties, so it’s very much new wealth. These HNWI are looking for luxury brands, especially automobiles, as a means of showing off their newly gained status and success,” adds Roberts.
Besides the ongoing shifts in preferences and tastes among younger consumers, Inchcape Kenya’s foray into motorbikes is likely to present another growth opportunity and an additional revenue stream. There is a fledgling biker community in Kenya and the BMW Motorrad brand is proving to be a popular choice, going by the growing number of Motorrad F 750 GS, and F 850 GS, not forgetting the R 1250 GS/A, the big boy of them all.
Inchcape also stocks the smaller G 310 R and the C 400 X. Maybe the Police Service could get these in large numbers to earn them the needed presence and respect needed on the roads.
Inchcape Kenya is also serving the enterprise market segment through Lease and Rental, enabling businesses such as hotels and tour companies to lease luxury brands for their clients. Asset leasing is not only more affordable in the long run when compared to acquisition, but it also frees up the cash flow of a business, allowing the business to deploy its resources towards its core activities. There is no overstating how important this is, especially in the wake of the Covid-19 Pandemic when firms in tour and travels are keen to re-engineer recovery and embark on the path of growth, by attract high value clients while simultaneously maintaining a healthy balance sheet following last year’s disruptive impact on their financial resources. Inchcape Kenya seems well poised to continue on its impressive run.