Kenyan-based automaker Mobius Motors, supported by Playfair Capital, has entered voluntary liquidation after nearly a year of failed rescue efforts.
The company, known for producing rugged, low-priced SUVs tailored for the African terrain, decided to cease operations due to financial difficulties, as stated by the company and confirmed by a shareholder on Tuesday.
During a meeting on August 5, 2024, Mobius Motors resolved to enter liquidation under Section 393(1)(b) of the Insolvency Act. The shareholders appointed KVSK Sastry as the liquidator to wind up the company.
“Notice is hereby given that a meeting of the creditors will be held on August 15, 2024, at 9 am at Mobius Factory (Sammer Africa, Mombasa/Enterprise Road Junction, Nairobi),” announced Mobius Motors director Nicolas Guibert.
He mentioned that during the meeting, they will consider and, if deemed appropriate, pass a resolution approving the shareholders’ nominee as the company’s liquidator under Section 408 of the Insolvency Act. Additionally, he noted that the list of creditors and proxy forms will be available for inspection, free of charge, on August 9, 2024, at the company’s offices at Mobius Motors, Block C3, Sameer Business Park, Mombasa Road, Nairobi.
Unsustainable Business Model
The company has struggled to settle suppliers and pay salaries as operational debts increased. Founded in 2009 by London-born investor Joel Jackson, who experienced the continent’s challenging roads while working for a forestry company in Kenya, Mobius found that tax hikes in the East African country rendered its business model unsustainable.
The owners considered relocating production to another country, but logistical challenges of moving the existing assembly line from Nairobi led to the rejection of that option, the shareholder added.
Mobius built 50 units of its first model and released Mobius II in 2018 and Mobius III in 2021.
Since its founding, the company raised $56 million over five funding rounds from nine investors. The first model, priced at $10,000, equivalent to about Kes.1.3m, was significantly lower than the market prices of standard SUVs in Kenya.
The company produced only 50 units of this initial model before launching the Model II, which was priced at Kes. 1.5 million.
The most recent model, Mobius 3, is priced at Kes. 3.95 million, excluding VAT.
Despite these efforts, the company failed to capture the Kenyan car market, which is flooded with second-hand imports from the UK, Japan, and other Asian countries.
It remains unclear how the company will address the needs of its customers, who will still require access to spare parts and after-market support for their vehicles.
