When First Lady Margaret Kenyatta shared her vision about plans to use mobile trucks in the Beyond Zero campaign, Rita Kavashe, Managing Director General Motors EA Ltd quickly conceptualised the idea and delivered in three weeks.
By MURUGI NDWIGA
Rita Kavashe, Managing Director at General Motors (GM) East Africa Limited is a visionary leader. She also has an entrepreneurial instinct, she can quickly scan the market and grab opportunities when they present. A classic example is the Beyond Zero campaign, an initiative to reduce mother and child mortality. When the First Lady Margaret Kenyatta shared her vision and said she would use mobile trucks during the campaign, Kavashe took it upon herself to quickly design a truck that would suit the First Lady’s idea. “It was a market opportunity for us. We are a local company and we were able to develop that truck at a cheaper price,” says Kavashe, who delivered the truck in a record three weeks after the First Lady’s presentation. Since then, the company has continued to develop and supply mobile trucks across various counties in Kenya.
Kavashe is the first woman to head the 40-year old organisation. Her leadership, she says, is “very focused on results and entrepreneurship.” This description, as she reveals, emanated from her employees, customers, family and the people she interacts with. She sent out a questionnaire because she wanted to know what these people thought about her leadership capabilities. “If you are just a manager running the day-to-day activities of an organisation, I do not think you will go far. An entrepreneur looks at the business opportunities and rallies the support of everyone to go forward.”
Carving a niche
GM’s origin is the United States (US). Alfred Sloan, who helped GM grow from the 1920s through the 1950s, is famous for his market segment strategy of ‘a car for every purse and purpose’. The idea was to divide the US vehicle market into segments by price range. Each GM brand’s products was to be focused on one segment, with Chevrolet at the low end of the market and Cadillac at the high end. With rival Ford Motor Company sticking to a single model in a single segment, GM overtook Ford as the sales leader in the US market. From 1929 until 1971, Ford and Chevrolet took turns at the top spot off and on, until Chevrolet grabbed the top spot for the 16 years spanning 1972 to 1987.
“We can hack it if we focus on the emerging needs of our customers… the reality on the ground is that we are playing in two segments. We cannot bring a whole range of our products and only sell one or two,” says Kavashe. The company’s two main brands in Kenya are Chevrolet and Isuzu. Chevrolet focuses on the medium saloon car segment, which has a capacity of 1.8 litres, and the mid-sized SUVs that target government institutions and high-level managers. “We are playing in the middle and high end markets,”she says. Isuzu Motors and GM work closely on manufacturing and distributing vehicles on the African continent- mostly trucks. Apart from Kenya, they have a base in South Africa and Egypt.
In Kenya, the motor industry is growing rapidly, so are the trends. For majority of Kenyans who want to buy a car, only a handful opt to go to the showroom. Most people prefer importing second-hand cars from foreign markets. Kavashe notes that Kenya import approximately 7,000 second-hand vehicles every month, while only 19,000 vehicles are bought from Kenya’s showrooms annually. She, however, remains optimistic that this trend is and will slowly change, given the rise of the middle class and availability of credit facilities. “As the economy continues to grow, and people get more money, the desire to own new products will increase. Therefore demand, especially of personal vehicles, is likely to increase.” GM has products for everybody, but only the market can dictate when they can bring more products.
In 2015, Kavashe says the number of new cars sold (from GM) will be approximately 5,000 units. This is an increase compared to other years.The company has identified an opportunity in the smaller passenger cars segment, but the Kenyan and overall East African market is not ready for their products yet. “The size of the market is huge, but second hand vehicles have eaten into a huge percentage of this business. With this, the new vehicles franchises are not able to optimise on the opportunity that is in East Africa.”
However, GM has a significant market share with their Isuzu brand, which comprises of the pickups, light commercial trucks (one tonne to six tonne), medium trucks and buses. Most buses used as Public Service Vehicles (PSVs) in Kenya are Isuzu. While buyers of personal vehicles love second hand vehicles, conditions have favoured GM in the commercial trucks segment. Most buyers prefer buying trucks locally as it is cheaper than importing. Kavashe says the company has a competitive advantage in this area.
Growth in people development
Kavashe’s focus, she says, is not only to see the company grow and make its mark in the market, but to have employees also develop and nurture themselves. She started by developing the capacity of employees. Training touched on customer service, product and sales. “We had to retrain ourselves to take care of this new group of customers.” Further, assembling of the trucks is not a hurdle, as Kavashe reveals, since the Polytechnics in Kenya churn out a number of technicians who can put the trucks together. With over 30 years experience, GM East Africa designs and assembles vehicles to meet local operating conditions, with at least 50 per cent local content on some models. Due to its big scale as a global corporation, employees get opportunities to train, develop and improve their skills from other GM plants.“Developing employees has exposed our employees to different work environments. They come back with a lot of ideas,” she says. Every year, the organisation recruits about 10 to 15 University graduates on contract basis and develops them. When need arises to employ permanent staff, first priority is given to these graduates. “That is a resource that we are developing internally- we are not going to hire directly. We are having our own pipeline of fresh graduates. They have done a fantastic job.”
Kavashe values relationships with suppliers and dealers. She believes this is the only way to keep abreast in business. “They are very important infrastructure for the success of our business… that is an area I think I have done a fantastic job in creating linkages between GM and our main suppliers.”