Mobius Motors – Perspectives on “the car for Africa”

Almost all social problems are rooted in one cause – poverty. This is why broad based economic development, and enterprises or institutions which create or redistribute wealth or value are so important. This is not a new thought – the old adage, “teach a man to fish” is almost clichéd. I find great purpose in my work for a deep rural agricultural microfinance institution, because it creates and distributes wealth to the base of the pyramid.

But some problems require more immediate, direct and literal solutions. It is much easier for example, to eradicate diseases like polio with a few simple drops delivered directly by a state social program or NGOs, than to wait a couple of generations for society to be wealthy and functional enough to build out private infrastructure and institutions to deliver polio drops.

Where does access to transportation fall? Will transportation only become universal as poverty is alleviated, or does it require a more immediate and literal solution? The good folks at Mobius Motors, dubbed “the car for Africa”, belong to the later camp. Joel Jackson, the founder, suffered from the transportation problem first hand, waiting for hours and walking long distances to serve clients at Kamaza, a social enterprise which enables farmers to plant wealth creating eucalyptus trees along the Kenyan coast. Getting around in deep rural Kenya is tough – while I have been lucky not to have to walk for miles or wait for hours for unreliable public transport, I have had my fair share of adventures. Visiting loan groups for example, riding on the back of a “bota bota” or motorcycle taxi for an hour, clinging to the back frame for dear life on dirt roads so bumpy and terrain so hilly, I had to close my eyes and think good thoughts consciously to “enjoy the ride”.

Mobius hopes to change this. They already have a second prototype built out and have begun taking orders for their first batch of serial production, with 50 cars rolling out of the production workshop by the end of the year. The car is priced at USD 6,000. For some reason the first prototype reminds me of the Ford Model T (Exhibit A), whereas the second one looks like something in between an old Land Rover Defender and a new Range Rover (Exhibit B). I am told that the 50 units will be based on a third prototype which is yet to be produced, but will be narrower and sleeker.

The overarching design principle is simple and clever. Using a standard Toyota Corolla engine, which can be serviced and repaired easily almost anywhere on the African continent, they have built around it a body with a simple pipe frame covered with a thin metal sheet. The car is stripped of all frills including a solid roof, with some of the savings invested in greater ground clearance and a robust suspension to handle the bumpy roads. The design is thoughtfully tailored to the African market.

The car looks novel – we took it around Kibera, the largest slum in Nairobi, for a test drive and on lookers cheered us, with two separate groups even shouting “Al Shabbab”, the name of the Islamic rebel group fighting the Government and Kenyan security forces in Somalia. Who doesn’t like a new car, especially an indigenous car everyone can call “Kenyan”? Who doesn’t like building or investing in a new car company?

But beyond the novelty and fanfare, I want to think deeply and critically through what it will take to make the car succeed at solving the transportation problem in Africa. First of all, at USD 6,000 it is beyond the reach of the vast majority of the African population, with an average income of just USD 1,000 a year. Cars are fundamentally not cheap, whether they cost USD 12,000 and include airbags and power windows or are stripped of all the frills to slash the price by half. I at least think that broad based economic development and wealth creation will do more to solve Africa’s transportation problem than an immediate and literal solution in the form of an actual car.

It will however serve the existing transport market, whether for middle class households looking for an affordable ride, or for transporters and service middlemen in urban and rural distribution. Right now, the households have to buy second hand reconditioned cars from Japan, and the transporters rely on existing bikes, tuk tuks, vans and trucks in the market.  Goods and people are actually moving around where there is population density and where people are prosperous enough to afford transportation services. Mobius will just add to the array of options in this already existing market – with a unique price point and utility combination which might be superior to some of the other offerings for some buyers. Our Toyota Hilux truck at my microfinance institution, set us back USD 30,000 but can perform wonders. We can, however, buy five Mobius cars for one Toyota Hilux truck. And even though the two are vastly different beasts, with the Mobius able to do less, I think five Mobius’ deliver far more value than one Toyota Hilux to our microfinance operations.

But the question is whether or not Mobius is in fact a unique car on the global market. I think there are plenty of contraptions in India, Pakistan and China which are very similar in design to the Mobius. If I think about just India, a market I know somewhat, between the Mahindras and the Tatas there are over a dozen low cost models which cover the full spectrum of price points and utility (Exhibit C). In Pakistan, the old Suzuki Ravi, Hyundai Shehzore, and Suzuki Bolan are competing for this space (Exhibit D). They are extremely low cost, 800 cc vans built on 1970s carburetor engines with robust suspensions. I have seen them successfully climb the steep hills of Muree and whisk through the bumpy dirt roads in the plains of Punjab. Modular in design, owners can build out seating and shade in the back, using them for passenger transport, or build out a cabin to transport goods. They perform well even though they are almost always overloaded with everything from passengers to freshly harvested sugar cane. Priced at USD 5,000 to USD 8,000, this is as affordable as transportation can get.

But even if the car already exists, there is no harm in building another one. Except that the product development process at a nascent institution lacks the capability, efficiency or rigor that a Tata is able to invest in building out the Nano for example at Italdesign, a specialized automobile design and engineering company based in Italy. Italdesign has designed and tested out everything from Lamborghinis to Volkswagen Beetles. I guess an automotive engineer and a few mechanics can get together in a garage and knock anything out. But if a product’s fundamental cost advantage is that it lacks the investment in man hours to develop it, then why doesn’t automotive production become a cottage industry? Why invest in thousands and thousands of hours of rigorous design and testing?

Also, with a two year product development cycle, nascent organizations can become very product centric. This is true not just in automobiles but also emerging products like solar solutions. “Build and they will sell” – but I suspect that it’s not that easy. Success lies in distribution. One always hears about the 3S in the automotive industry – sales, service and spare parts. Buyers are often reluctant to take the plunge until all three blocks are in place. And they want nationwide coverage – cars are after all moving from place to place. Sure we’re talking about a basic Toyota engine which can be serviced by any mechanic. But will buyers take the first leap? One example comes to mind of Adam Motors in Pakistan – similar idea of an indigenous and low cost car. They built three models (Exhibit E). Adam Zabardast, a super low cost pickup van built on a basic 1970s carburetor engine, Adam Revo a small low cost car comparable to the Tata Nano, and Adam Boltoro, a basic but highly rugged SUV. They sold thousands of cars – indeed many patriotic Pakistanis were excited about buying an indigenous Pakistani car. But within a couple of years they were out of business. Their products were breaking down frequently, and they did not build out the 3S infrastructure to service them. By the time they realized this, their reputation was tainted and it was too late to resurrect themselves.

Mobius is also sexy because it is sowing the seeds for the engineering industry in Kenya. Pakistan, for example treats engineering as a priority sector for development, and is already supplying automobiles to Kenya. In fact, many of the buses on Kenya’s Roads, including the infamous “Citi Hoppas” are built by Master Motors, a company based in Karachi. Pakistan’s engineering companies also supply low cost engineering goods to other emerging markets like Bangladesh and Sri Lanka, where customers value cost and are not too demanding on quality. Pakistan has two things going for it – Government protectionism, with 100% plus tariffs on imports, the lifeline for many highly inefficient engineering companies. And we have a very large demand for motors and generally mechanical and ferromagnetic stuff – from the fans which our 180 million strong population require to brave our hot summers, to the pumps our farmers require for agriculture. Gujrat City, in the heart of all the demand in Punjab is an engineering and white goods (refrigerators, washing machines and other household appliances) hub – little kids learn how to weld before they can even walk. My vision is to turn it into a global champion for white good design and manufacturing, much like what Turkey is today.

Building the first serious automotive engineering company in Kenya must be a challenge. From building out supply chains, to ensuring goods clear Mombasa’s port smoothly, to building local production know how. The journey to building out a Gujrat City in Kenya has to begin with a single step. But if the fundamental problem in Kenya and across Africa is that the right car is not being delivered to these markets by foreign automakers, and if the demand and market already exists, then why don’t the likes of Toyota design something similar and build it efficiently in one of their global factories, ultimately building assembly plants out in places like Kenya? They already have the design teams, the production know-how, local sales, service and spare parts. Why go through all this hassle? The answer might be that the likes of Toyota are “sleeping on the wheel” – thus the need for Mobius. A solid exit option might be to sell the Mobius idea and franchise to a major global automaker. If Mobius can open their eyes and show them that this market exists, the 3 to 5 years of toil in the workshop and building 3S all over Kenya might be well worth it.

All the best team Mobius!