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Vehicle outsourcing picks up in Kenya

NAIROBI, Kenya, May 21 – Outsourcing of motor vehicles is becoming the trend in Kenya as companies look for new measures to cut operational costs.

General Motors East Africa (GMEA) Commercial Director Rita Kavashe said on Friday that the last five years had witnessed a shift in ownership of vehicles as companies buy into the idea of outsourcing the services.

“Leasing has grown by close to 15 percent and this is definitely going to grow as more leasing companies come into the market,” Mrs Kavashe told journalists.

The trend has also been picked up by small and medium enterprises which are looking to grow their businesses.

She revealed that the most common vehicles being leased from GMEA are pick up trucks and light commercial vehicles mainly by players in the construction and delivery business.

She was speaking during the signing of a leasing agreement worth Sh22 million with Vehicle and Equipment Leasing Limited (VAELL) for nine vehicles.

VAELL Relationship Manager Anne Njenga said leasing offered 30 percent savings to their company ensuring it uses vehicles at the age they are best productive with the option of replacing them later.

“The biggest advantage for a company is that they do not tie down their capital. When we offer these vehicles they keep their money in the bank for other uses within the organisation,” Ms Njenga said.
VAELL is part of a group of companies that have over a decade of experience in asset leasing.
The company lists over 50 large organisations spread across the manufacturing, horticulture, mining, technology and international and donor organisations as clients.
Leasing sits well with motor vehicle companies such as GMEA as it ensures ability to establish contact with potential customers.

“GMEA is very keen to support such ventures as we look for ways for customers to own our vehicles,” Mrs Kavashe said.

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Despite the harsh economic conditions, GMEA has been able to grow its market share to 22.1 percent (as of April 2010) from 19 percent in 2009.

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