I was rather surprised by the amount of feedback I got following my post on Kiira Motors last month. I’m not a frequent blogger and my posts usually attract a few views, retweets and LinkedIn likes. Twitter and LinkedIn are the only platforms linked to my blog and Twitter is the only social media platform I’m active on. That post attracted a significantly higher level of activity including a number of personal messages via different messaging apps. Most of the feedback was positive in the sense that the persons largely agreed with what I wrote. Some of it wasn’t and made for some lively arguments on Twitter.
I contemplated writing a follow-up post delving deeper into the issues I raised. I however realised that it would only be fair to get a firsthand account from the actual people behind KMC – the horse’s mouth so to speak. I’ve actually wanted to visit them for a long time but I hadn’t gotten round to doing it.
So that is how I and a few friends found ourselves on the new Kayoola Diesel Executive Coach early last Saturday morning (20th March 2021). Destination? The site of the upcoming KMC plant in Jinja.
Obviously, a lot of people may think KMC approached me to set this visit up. That couldn’t be further from the truth – I personally raised the idea on Twitter and then followed it up with Denis who handles communications for the company. The guys (and lady) I went with all jumped onboard – no pun intended – after spotting the tweets.
When we initially raised the idea of visiting KMC, our thinking was that we’d be driving ourselves to Jinja or Luweero (the plan was to visit both sites but obviously on different days). We were therefore pleasantly surprised to learn that we’d be taking a ride on one of KMC’s products – the Kayoola Diesel Executive Coach. Of all of the company’s concepts/prototypes/products, I had only previously checked out the original Kayoola bus. This was at an exhibition and I didn’t get to take a ride. I wasn’t really impressed by the product then and I remember thinking it needed a lot of work if it were ever to enter the market. My initial impressions of the Diesel Coach couldn’t be more different. Everything about the coach oozes quality – from the bamboo floor to the leather reclining seats and overhead AC vents. The LED mood lighting lends the interior an air of sophistication as well as the under-seat USB charging ports. My first impressions and those of my co-travellers were very positive indeed.
Once we got moving, I was even more impressed. I had heard and read that the coach has air suspension but as we all know, talk is cheap. For air suspension, the proof of the pudding is indeed in the eating and it was immediately obvious once we set off that the ride was a cut above your typical bus. Air suspension absorbs bumps and produces the kind of smooth ride that anyone who’s experienced clunky steel suspension will immediately notice. Navigating through the Bugolobi potholes, the ride was incredibly smooth and comfortable and this was the case for the entirety of the journey.
By the time we alighted at the factory, it was clear to me that any discerning end-user (i.e. passengers) would love this product.
I love factories. As a matter of fact, there are quite a number of them on my “places to visit” bucket list. Of those destinations, the majority are car factories ranging from Toyota’s marvels of JIT efficiency to Mclaren’s space age, clinical Woking operation. To me, factories represent mankind’s ingenuity that’s been honed over the centuries from early man’s experiments with fire and rudimentary metalwork through the Industrial Revolution to today’s highly advanced plants. So it was a real thrill to see the new factory up-close. The very first impression was the size – it is big! The first thing Dan exclaimed as we squinted at the structure was “this thing is bigger than the Entebbe Airport passenger terminal!”. Knowing how deceptive size comparisons can be to the human eye, I can’t say for sure whether that statement holds. But it is probably true. If it isn’t, then it will eventually be the case since the structure we were looking at is Phase 1 and it is the smaller of the two buildings planned for the plant. Phase 1 will handle final product assembly which is what is currently being done in Luweero at NEC. Phase 2 will involve setting up a much bigger structure that will house the pre-final assembly manufacturing processes such as the bodyshop and paint stations. That structure will definitely end up being one of the largest buildings in this country.
Of course, there’s the worry that the second phase won’t actually be built and delivered on time. After all, the Northern Bypass is in this very country. But there is reason to be optimistic and that reason is – surprise surprise – the UPDF. The army’s engineering arm is handling the construction and, by all accounts, they are doing a great job. Obviously, I have very mixed thoughts about this. On one hand, I’m one of those that utterly hates the government’s insistence on handing everything over to the army to manage (NAADS, OWC etc) because the head of state believes only they can handle. I find that rather ridiculous. On the other hand, judging by their performance on the KMC factory civil works, if industrialization must be delivered by their hand, then so be it. I quipped – and not in jest – that it would probably be much better for the country if the army were restricted to this kind of work as opposed to breaking opposition limbs on Kampala’s streets.
Phase 1 is already roofed and work is proceeding at breakneck speed to complete the remaining work over the next 3 or so months.
The entire project is sitting on 100 acres of land and should have, in addition to the plant buildings, a test track, some staff/worker facilities and a few other amenities. The plans look very impressive indeed but, more importantly, the implementation so far looks even more impressive.
With us on the trip to and from the site were a handful of KMC staff including Allan Muhumuza and Ruth Nasejje. Allan is the head of marketing and sales at KMC and is, for most people, the face of the corporation. Ruth is the media strategist and is one of the most “new-age” digital media-savvy people you’ll come across. At the site, we were welcomed by the CEO Paul Isaac Musasizi and the NEC project managers. If it is true that you can always tell the nature of an organisation by interacting with its people, then KMC is clearly a far cry from many other government parastatals and bodies. Each person we interacted with was passionate and pretty knowledgeable. It is clear that they are enthusiastic about their work and they are going the extra mile to do their bit to prove doubters wrong.
Having listened to and read a lot of stuff about KMC over the years, one of my concerns has been the general picture created of their endeavour being a rather simple one. In my opinion, the always-upbeat tone coupled with the always-rosy forecasts serve to raise unnecessarily high expectations in the public psyche that then generate a lot of negativity when they’re not met. I can understand the need to always be positive. But the positivity should be tempered by healthy doses of realism. Making motor vehicles is a difficult, difficult business and kick-starting an industry in a “greenfield” country is even more so. In talking to the KMC people, I was curious to see whether they’d come across as realists that acknowledge this and that are aware of the huge challenge before them. I was therefore pleased when they did exactly that. We discussed the challenges of financing, local supply chains, electricity, market purchasing power, commercial vehicle owner skepticism, talent and even “simple” problems such as sourcing accurate market data. In all this, they presented sober and realistic viewpoints that left us in doubt that they understand the big picture and all the intricate details.
At the end of the day, an organisation is only as good as its people and I think KMC is in a good place in this regard. I hope they continue to get the best and brightest – they will need them!
Revisiting My Post
Given the above, you may think my opinions as expressed in my first post have completely changed. Unfortunately, you’d be mostly mistaken :-). It was clear from some of the reactions to the article that the readers hadn’t taken the time to digest the two key points I made. If they had, they would have understood that I wasn’t really attacking the company. I was merely pointing out the strong headwinds that the company will have to navigate if it is to survive and thrive. But those headwinds are not of the company’s making and most of the responsibility for fixing them lies elsewhere. To be clear, the two main issues I raised were:
- Potential under-investment
- Lack of a supportive eco-system
The former is quite clear – if the company doesn’t get enough funds to finance its masterplan, then it just won’t survive. If anything, this should be viewed as a call to the government as the majority share-holder to ensure the necessary funding is in place.
The latter issue also still holds – if we are looking at a truly indigenous automotive industry, then we need to have local talent across the entire spectrum of roles: from design to assembly and repair. We also need to have local suppliers for significant amount of the inputs (parts) into the vehicles (significant by value). It is not a lie to say that we don’t have all these in place now and it was refreshing to discuss this particular issue with the KMC team and listen to them explaining how they intend to navigate it. But it is important to note that a lot of the responsibility for fixing the ecosystem issue doesn’t lie with them. They can’t change our education system in order to start churning out the kind of people they need and neither can they offer the necessary incentives to potential suppliers. They can’t (or rather shouldn’t) write the necessary legislation and regulations that the industry requires. It would be great if they can offer excellent financing to potential customers but that would probably best be done in concert with financial institutions over which they don’t have any control. They can’t even guarantee stable mains electricity and water supply to their plant (all they can do is put in place reliable backups which translates into additional costs). What should be abundantly clear to any right-thinking person that reads this is that a lot has to be aligned for KMC to succeed and a lot of that is down to other stakeholders. Therefore, we need to collectively make our voices heard in the struggle to get those stakeholders do their part!
One thing that I must make clear is that even though that post came about because of an argument about “assembly” vs. “manufacturing”, I didn’t dwell on that in the first post. The reason for that is simply that – to me – it really doesn’t matter much beyond the “made in Uganda” bragging rights. Assembly is the final stage of the manufacturing process and even a factory that does only assembling is far better than empty space. To me, what matters is the value that the assembly stage brings to the table. Capturing just 10 or even 5% of the value of the finished item in the assembly process would be a huge achievement even if all the parts were imported. Of course, if some of those parts were eventually replaced by locally manufactured ones, the better.
There’s something I mentioned at the start of that post which I definitely still stand by – the need to take care of the minor, seemingly unimportant details such as website content. My close friends know me for my obsession with detail (which they take for pedantry – alas!) but that is something I recommend for everyone and every entity out there. It was probably a tad harsh but such things need to be pointed out. Going forward though, thanks to last weekend’s engagement, I will be sharing my “pedantic” observations with the team directly.
All that said, there is one thing on which my views have certainly evolved. At the end of the first post, I asked the following question: Is there anything else we could be pouring our efforts into that would have greater impact in the same area? My answer was ‘I think so‘. What the visit did was change my perspective – I am now cautiously optimistic about this project especially given the relatively low cost. For that cost, KMC can help kickstart a more advanced generation of industries (relative to what we have now) from which we would gain a lot of benefits. Obviously, this will take excellent execution and a dose of good luck but what serious undertaking in this world doesn’t require those two? I am a lot more positive about KMC than I previously was and I hope they live up to my expectations.
As we made our way back home, I once again reflected on the quality of the ride and the fact that it was a couple of notches higher than that of the bus rides I’ve previously had. Ironically, given the whole assembly vs manufacturing hullabaloo, the reason for this is simply that most of the parts were from an established manufacturer and were therefore of proven design. The engine is a Cummins model which should bode very well for maintenance and durability. But whereas some might see this as going against the “made in Uganda” pledge, I see it as the kind of pragmatism that the company needs to succeed. Despite the obvious romanticism, developing such a product from scratch would be a fools errand and the company would probably be reduced to rolling out prototype after prototype for years if not decades. By going down this route – sourcing parts and assembling tried and tested products (with some local design input in some areas), the company is going for the most practical way of extracting value from the manufacturing process which would otherwise have been lost to regional rivals. KMC will readily tell you that the plan is to achieve 65% local content within a decade (2030) but that always gets suppressed in the “Made in Uganda” noise. Going with a diesel engine is the most obvious sign of the much needed pragmatism; whereas electric vehicles are the future, the market for commercial inter-city transport right now requires diesel vehicles. It is far better to capture a slice of the current market today than wait and capture it years from now. After-all, establishing a foothold now means you will be present to take advantage of the conversion when that time comes (if you execute well).
Talking of the market, I do wonder what the people who really matter think about the product. Those are the actual bus owners/operators in this country. The Executive Coach is a very attractive proposition for consumers because of its lovely ride and excellent interior. Unfortunately, consumers in any public transport sector don’t make the purchase decisions. I imagine most operators (with the exception of the corporate, tourism and hospitality sectors) don’t care much about the luxury features and would prefer a few more seats and less bells and whistles (charging ports, reading lights, AC vents) if that means a lower product price. Then most of them would probably like to see what the product reliability is like over the service lifetime of the vehicle, availability of parts and the whole total cost of ownership. I think fleet operators will be a bit worried about the durability of the air suspension, bamboo floor and some of the interior fixtures so they may opt for more conventional options which would be a shame for passengers! But then, many passengers in this market are probably more concerned about price than anything else. Because of all these issues, I hope KMC is able to provide the kind of after-sales service that turns skeptical customers into fanatical loyalists. If they’re able to put in in place some creative financing options for them, that would go a long way in easing the decision making process for would be buyers.
Ultimately, as previously mentioned, I am a lot more positive about this venture. Obviously, nothing is guaranteed and even perfect execution may not be sufficient to ensure success. But it became abundantly clear to us that the company is doing all it can and that they’ve given the challenges a lot of thought (and they were very frank about them with us). I like the current pragmatism. I do wish though that the public messaging was adjusted so as to reflect some of the complexity involved. I sympathise with them a bit on this given the audience for the messaging wants to only hear particular narratives. For instance, that audience wants to hear that the product is purely Ugandan and yet that just isn’t practical. It isn’t practical and yet it isn’t very important either. Just establish the supply chains and then start substituting parts over the long term.
The team of “technology and development enthusiasts” (as we called ourselves in our correspondence with KMC) was a pretty interesting bunch of people:
Interestingly, I was meeting some of them for the very first time despite being Twitter friends for a long time. They are the kind of people you should spend time with if you are a serious person so give them a follow. David came along with his son Jeremiah and it was fascinating to observe the youngster up close. As we quipped, he’ll probably be the KMC CEO a few decades from now. One of the many personal positives from the visit is that we agreed to make it a regular thing; we intend to visit as many of the kind of commercial establishments (industrial, agro, services etc) that we think are keeping our economy humming. The intention is to learn as much as we can…as we try to see how to end up as one of them. This alone made the trip worthwhile!
The KMC people we were with were fantastic hosts and here are their Twitter handles too:
The company’s handle is Kiira Motors.
Disclaimer: KMC transported us to/from the site and hosted us to a lovely lunch as well.