Matatus in Kenya: BY John Karuki : This is a venture in Kenya that is hated by many and loved by few, many have made money from it others dread hearing the term matatu.
Is the Matatu business a good and profitable one? Well yes it is;
Just like any other business; you need to have a goal. Ask yourself a few questions before start the journey of owning one;
1. What is the purpose of you investing in a matatu?
2. What goal do you intend to achieve by getting into this business?
3. What is your strategy?
Based on experience; there are a few things I would advise anyone who intends to venture into this business:
1. Let not the Matatu be your primary source of income. Why most business people invest in matatus is to boost their cashflows. Even a single matatu can be a remedy for cashflow so as to increase creditworthiness. Remember that say Sh. 4,000 that gets to your account daily really improves your banks statements
2. Do not invest in a business that you do not understand. As a new matatu investor, always seek advise and mentorship from someone who has experience in the business. You can even go to the extent of asking them to manage it for you as you learn and gain experience.
3. Do not start the business with an old vehicle.
Old vehicles are prone to plenty of downtime.You will die of hypertension.
4. Get an organised matatu SACCO, especially the ones that are keen on the general well being of your vehicle; one in which you can access credit/loans in case your vehicle needs some expensive repairs or you need to buy another van.. SACCO loans have friendly payment plans especially when the Matatu is in their fleet.
5. Have a trusted mechanic; and stick to one mechanic. Also do some due diligence when scouting for spare parts. The moment you go wrong in the garage; the entire chain goes haywire.
6. Get a good and organized driver. Do not employ your relatives. If the vehicle is under someone else’s management, allow them to assign a driver to the vehicle.
7. Never attach sentimental value to a Matatu. The goal is to make some money; not to see it in your compound every evening.
Kenya’s Matatu business is arguably one of the ventures that can give you the best cashflows if managed and understood well. To be able to run the business profitably; you need the right van for the right job.
Since inception of the 10/14 public transport passenger vans in Kenya, two brands have dominated the market.
The Toyota Hiace and the Nissan Caravan. The history on how this vans compete has evolved with technology.
Today I am going to give you an up close and candid comparison of the two vans. Which is the best bet for the Matatu business?
This comparison is based on the following variants of both vans:
1.Fuel Type- Diesel
2.Wheel base- Short wheel base
3. Roof- Standard
4.Market- Foreign used (Mtumba)
Both vans can seat 10-14 pax comfortably. However the Nissan Caravan NV350 has a wheel base that is 1 inch shorter ( for the short wheelbase versions) compared to that of the Hiace which makes the seats look a bit crumpled especially if they are fitted 14 of them. The Hiace is more comfortable.
Believe it or not the 2500cc YD25-DDTI that comes with the diesel powered Nissan Caravan NV350 is 20 Horsepower more powerful compared to the 3000cc 1KD-FTV (one of my favourite diesel engines) that comes with the Toyota Hiace. I have driven the NV350 and it’s faster and can chew hills more aggressively compared to the Hiace..
I am not hating but you cannot mention the word “reliability” with “YD25” in one sentence. If you want to know how unreliable a YD25 is, ask someone who has had problems with a Nissan Navara. Despite the upgrades on the YD25, it’s still a bit far away from reliability. Some of the most common problems with the YD25 are overheating, injector failure, fuel pump failure, turbo failure and excessive oil consumption especially after they hit several thousands KMs on the odometer. The 1KD-FTV is however very reliable if taken good care of..it’s simply perfected practicality. Several units I know have already hit the 1,000,000 kms mark and still going strong, however you really need to watch the quality of fuel.
Value for money:
The NV350 is very well priced as compared to the Hiace. The Hiace remains to be more expensive mostly because of the forces of supply and demand.
For one venturing in the Public Service Transport, I would highly recommend the Hiace. The Hiace is an icon of perfected practicality and a workhorse.. Most of our mechanics are also familiar with the Hiace van.