In this web-exclusive Q&A with Mary Njema of Active Car Hire in Nairobi, Kenya, she explains how local rental demand has decreased as more Nairobi residents can afford car ownership. But through tourism and rentals by researchers, non-governmental organizations and the like, Active Car Hire has steadily increased to a fleet of 50 cars since starting in 2006.
What's your fleet size?
We have a fleet of 50 cars. We started in 2006 with one car that we bought through a loan and worked with it as a taxi. Now we are a full-grown car rental/leasing and transport company.
How many locations do you have and in what types of areas?
We have two locations: One at the city center in Nairobi and the other at Jomo Kenyatta International Airport (JKIA) in the arrivals area. The town office is the head office and is where all operations are done.
How did the business start?
The first sedan car we bought in 2006 was used for taxi services within Nairobi and airport transfers from and to JKIA. The business grew and at the end of 2006, we had acquired another sedan.
With two cars, we started doing car hire services and our clients could lease the vehicles on monthly basis for long-term rental. Our rates were very competitive and that made us grow at a high speed and by 2009 we had been able to get more vehicles including safari land-cruisers and other 4WDs.
At the moment, we have a fleet of 50 vehicles. Most of them we have leased, but now we buy brand-new vehicles from Toyota Kenya for our clients who need vehicles on a long term rental, and we have supplied hard tops land-cruisers for oil exploration in Kenya.
What are your primary sources of rental customers?
We work with both local and international organizations, including non-governmental nonprofits and other institutions. We have many repeat clients that we have served for more than five years. We also serve individual clients who make bookings through our online reservation form. We’re at about 50% online reservations and 50% locally made reservations.
Are you an affiliate of any kind?
We work with Njewa Safari Tours and Travel Ltd, who is a mother company to Active Car Hire.
What made you decide to include tour and even hired drivers in your business model?
Tour is doing quite well in Kenya and that’s why we decided to included safari Land-Cruisers and safari vans to transport our clients to various national parks and game reserves. Investors and business people are in large numbers in Kenya, and they rent vehicles for either long or short terms.
What have the advantages and/or disadvantages been in including these services?
Advantages of tour vehicles are that we have a high season from Jan. 1 to end of March, then from June 15 to end of December. During this period, the safari vehicles are in high demand — especially the 4WDs. These vehicles transport tourist and they use our driver guides.
Disadvantages of tour vehicles are during the low season when they are not in demand. The income is minimal but the drivers still have to receive their salaries.[PAGEBREAK]
Are you pursuing new sources of business/customers? What are they?
Yes we are pursuing new business and customers from NGOS, engineers, missionaries and consultants. We pursue them by visiting their offices and introducing ourselves and by sending introduction letters and our rates to potential customers.
What are you biggest challenges in the business?
We are not too old in the market but the car rental used to do well in the previous years because very few people could afford a car. Now, many local people can afford to buy their own vehicles. Thus the car rental business from the locals is coming down, but not too bad.
What are your biggest challenges with fleet?
Service, maintenance and dealing parking vehicles. Some of our roads are full of potholes which puts vehicles in the garage regularly. Spare parts are as well quite expensive. And then parking lots at Nairobi city center are fewer than the vehicles.
Describe your marketing efforts and what the payback has been so far.
Internet marketing and word-of-mouth is doing quite well. We also get recommendations from our clients.
How do you sell your cars?
We sell by using a local used car lot.
How long do you keep cars in fleet?
Second-hand vehicles we keep for only three years. New vehicles at zero mileage, we keep for five to six years.
What are your popular rental vehicles?
Land-Cruisers, hard tops, project vehicles, Prados, double cabins, saloon cars and Toyota Rav-4s.
What car rental companies are included in your competition?
Budget and Avis.
Are there a lot of independent car rental companies in Kenya?
They are so many. Some have no offices and operate from a brief case, which is quite risky to clients as many lose their money. By being registered and licensed, your company has an advantage because 90% of clients nowadays only operate with registered and licensed companies. Others even request your tax registration number and financial statements.
What does the car rental market over the next five years in Kenya look like?
The car rental business will be better only for those with perseverance and who know the industry very well. The car rental business does not favor dishonest people.
Any new laws or rules you must abide by?
All PSVs (public transport vehicles) have to be roadworthy. Inspection for public transport vehicles is done regularly. Speed has to be limited and a speed limit certificate displayed on the screen.
Where do you think the biggest growth potential is in your business?
Business is quite good in the oil exploration sector and business clients — not forgetting non-governmental organizations.
What would you like to see change in the industry in Kenya? Worldwide?
I would love to work with honest, careful and trusted clients.