CFAO raises KVM stake to 98%

February 06, 2025

From the newsletter

Automobile distributor CFAO Mobility Kenya, has raised its stake in Kenya’s largest assembly company, Kenya Vehicle Manufacturers (KVM), to 98%. The distributor invested $7.7 million to purchase shares previously held by the Kenya Treasury and the Chinese company CMC Holdings Limited.

  • KVM hosts an assembly plant for BasiGo, an electric bus manufacturer. Opened in 2024, the plant aims to produce 1,000 electric buses by 2027. The facility has also partnered with Kenyan EV manufacturer Roam to assemble its fleet of electric buses. 

  • CFAO Mobility Kenya is expected to exit its contract with the Mombasa-based Associated Vehicle Assemblers and focus on modernising the KVM assembly plant.

More details

  • CFAO Mobility Kenya, a subsidiary of the CFAO Group, has been actively advancing the electric vehicle (EV) landscape in Kenya. In March 2024, the company invested $3 million in BasiGo to accelerate the scale-up of electric bus manufacturing and delivery in Kenya and Rwanda. 

  • Furthering its commitment, in September 2024, LOXEA, a subsidiary of CFAO Mobility Group, became the sole distributor of BYD electric vehicles in Kenya, offering 100% electric vehicles for leasing and purchase.

  • In 2023, CFAO Mobility Kenya sold 3,639 vehicles across its various brands, including Toyota, Suzuki, Hino, Volkswagen, Mercedes-Benz, Hyundai, and Sinotruk. This indicates that the company has a well-established customer base and can drive EV adoption by providing consumers with more sustainable transportation options while leveraging its extensive distribution network.

  • CFAO Mobility Kenya aligns with the CFAO Group’s broader strategy to promote sustainable mobility across Africa. In Côte d'Ivoire, LOXEA launched the "Durability Tour" to promote green mobility by demonstrating the feasibility of long-distance travel with electric vehicles. 

  • Additionally, CFAO Motors Uganda unveiled the Toyota Corolla Cross Hybrid Electric, marking a significant step towards eco-friendly transportation in Uganda.

  • Other fuel-assembling companies can draw valuable lessons from CFAO’s initiatives. Investing in EV infrastructure and partnerships can position companies as pioneers in the growing green mobility sector. Diversifying product offerings to include EVs can also help meet the rising consumer demand for sustainable transportation.

  • Across Africa, the trend towards electric vehicle adoption is gaining momentum, particularly among companies that have traditionally sold ICE vehicles. For instance, Kiira Motors in Uganda has developed electric buses, contributing to sustainable public transportation. 

  • In Nigeria, Innoson Vehicle Manufacturing has explored EV production to align with global shifts towards green mobility. Meanwhile, in South Africa, major automakers like Volkswagen and Ford are investing in EV technology and infrastructure to meet the growing demand for sustainable transportation solutions.

Our take

  • Rapid urbanisation and the increasing demand for cleaner public transportation are creating a strong market for electric buses and motorcycles in Africa. However, the continent lacks a well-developed supply chain for electric vehicles and their components, such as batteries, semiconductors, and specialised materials, leading to dependency on imports.

  • Setting up EV manufacturing facilities requires significant capital investment in infrastructure, technology, and skilled labour. The opportunity lies in refurbishing existing assembly lines used for ICE vehicle production and upskilling the workforce with green skills. However, this transition should be implemented in a phased approach to align with economies of scale.