Kenya-based Mobius Motors, Maker of Low-priced SUVs Set to Shut down

Mobius Motors, a Kenya-based automaker backed by Playfair Capital, has announced its decision to enter voluntary liquidation after nearly a year of unsuccessful rescue efforts. 

The company, known for manufacturing low-priced SUVs designed for the unique challenges of African roads, has struggled with rising debts, unpaid salaries, and unsettled supplier accounts, ultimately leading to this drastic measure.

Liquidation Decision

“At a meeting of the shareholders held on 5 August 2024, it was resolved to place the company under liquidation as per Section 393(1) (b) of the Insolvency Act and appoint KVSK Sastry as the liquidator to wind up the company,” Nicolas Guibert, Mobius director, said in a notice. 

The decision reflects the legal framework that allows companies to voluntarily liquidate when a special resolution is passed by the board.

Financial Struggles

Despite raising approximately $56 million across five funding rounds, Mobius Motors has faced significant financial challenges. 

The company targeted small and medium enterprises (SMEs) in sectors such as infrastructure and agribusiness, providing vehicles that could navigate rough terrains. 

However, the inability to settle debts and pay employees has compounded its operational difficulties.

Founded in 2009 by Joel Jackson, a British entrepreneur, Mobius aimed to fill a gap in the market for affordable, durable vehicles. 

The company launched its first model in 2014, priced at $10,000 (KES 1.3 million), significantly lower than most standard SUVs available in Kenya. 

This pricing strategy was intended to attract customers in a market that heavily favored second-hand imports.

Product Development and Market Challenges

The initial success of Mobius Motors was marked by the production of 50 units of its first SUV model. 

Following this, the company introduced the Mobius II and Mobius III in 2018 and 2021, respectively. 

However, these models struggled to gain traction in a Kenyan automotive market saturated with cheaper second-hand vehicles from the UK, Japan, and other Asian countries.

Mobius’s production model relied heavily on pre-orders, requiring customers to place a refundable deposit of $384 (KES 50,000). 

This approach may have limited the company’s ability to generate immediate sales, as it depended on upfront commitments that did not always materialize into actual purchases.

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Support and Backing

Mobius Motors began mass production in 2015 after securing significant backing from Playfair Capital, a UK-based venture capital firm. 

Additional funding came from various sources, including Chandaria Industries, a Kenyan manufacturing company, the U.S. government’s development finance institution (DFC), and PanAfrican Investment, a private investment firm. 

Despite this support, the company could not achieve sustainable growth or profitability.

The Future of Mobius Motors

As Mobius Motors enters liquidation, the future of its operations and employees hangs in the balance. 

The decision to wind down the company highlights the challenges faced by automotive startups in Africa, particularly in a market dominated by established players and affordable imports. 

The closure of Mobius Motors serves as a cautionary tale for other emerging automotive companies in the region, emphasizing the importance of market adaptability and financial sustainability. 

The landscape for vehicle manufacturing in Kenya remains competitive, and the lessons learned from Mobius’s experience may inform future ventures in the industry.

The liquidation of Mobius Motors marks the end of an ambitious project that sought to innovate within the Kenyan automotive sector. 

While the company’s vision of providing low-cost, rugged vehicles for local businesses was commendable, the operational and financial hurdles proved insurmountable. 

As the automotive market continues to evolve, the story of Mobius will likely resonate with entrepreneurs and investors alike, highlighting the complexities of navigating the challenges of the African automotive sector.

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