Active Car Hire in Nairobi, Kenya, started in 2006 with a single car that was bought through a loan and rented out as a car with driver for airport transfers. The fleet has grown to three locations and 80 units today. “Now we are a full-grown car rental, leasing, and logistics company,” says Active Car Hire’s Mary Njema.

Active Car Hire rents from three locations around Nairobi — in the city center, at the international airport, and along Kiambu Road opposite Kenya Institute of Science & Technology. The company rents a wide range of models, mostly from Toyota, from sedans, minivans, and SUVs to safari-ready vehicles and camper vans.

While the rental markets in other African countries are mostly chauffeur based, Kenya has a greater mix of self-drive. Active Car Hire has recently started specializing in rentals of six months and longer, for which it buys new vehicles from Toyota Kenya. Long-term rentals can be hired with a driver or as self-drive.

The company, owned by Njewa Safari Tours and Travel Ltd., caters mostly to business clientele, from business people, foreign investors and oil exploration companies to private nonprofits (NGOs), particularly for events and conferences.

On the leisure side, the safari tour business is solid, Njema says, which prompted the business to fleet up with safari-ready Toyota Land Cruisers and vans to be used with driver guides. For tours, the high season is from the beginning of the year to the end of March, then from mid-June to the end of December. The problem is the low season. “The income is minimal, but the drivers still have to receive their salaries,” Njema says.

Active Car Hire markets locally as well as internationally through word of mouth, referrals from past clients, the internet, and social media. The company is active in outside sales to nonprofits, engineering firms, missionaries, and consultants. “We pursue new business by visiting their offices and by sending introduction letters to potential customers,” Njema says.

Individual renters can book through the company’s online reservation form. Njema says about half of reservations are made locally, and the other half are made online.

The company keeps new vehicles for five to six years. It fleets up with some used units; those are kept in fleet for three years. De-fleeted rental vehicles are sold through a local used car lot.

Business Challenges

Unscheduled maintenance is an issue for Kenyan car rental companies, owing to the area’s unfixed potholes. Spare parts are expensive. As well, Nairobi’s severe lack of parking is a problem, Njema says.

To increase public safety, the Kenyan government has mandated speed governors on all vehicles, and a speed limit certificate must be visible on the vehicle.

Nairobi still faces a large unorganized rental market. “Some have no offices and operate from a briefcase,” Njema says. “They don’t care about the risks involved; they are only interested in the small extra income.”

However, being above board has advantages — “90% of our clients nowadays only operate with registered and licensed companies,” she says. “Some even request your tax registration number and financial statements.”

Overall, “Car rental is growing very fast in Africa,” Njema says, adding that demand continues to increase as the number of business travelers and foreign investors in Kenya increases, particularly in oil and nonprofits. Foreign developers and business clientele rent for short and long terms, and long-term rentals have been an important new business source, she says.

An advancing Kenyan middle class may not be all good for car rental. “Car rental used to do well because very few people could afford a car,” Njema says. “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.”