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Cost of owning a 33 seater minibus in Nairobi.

08 Dec

MATATU INVESTMENT.
Matatu is a name associated with Kenya public transport sector referring mostly to the low capacity public service vehicles. Over the years, this sector has remained chaotic and mismanaged and many investors have kept a distance. But since public transport is more of a basic requirement, and people need to move from one point to another, the demand for public means of transport has continuously increased and provision of the same has remained one of the most rewarding investments in terms of returns to those already in the business.
WHICH MODEL IS THE BEST?

SANYO DIGITAL CAMERA
The Government is in the process facing-out lower capacity public service vehicles {14 seater Vans} in all urban centers especially in the capital Nairobi- it has been a continuing program for the last Eight years- investors are now going for minibuses with a capacity of 25- 29-33 and 47 seaters respectively.
Different vehicle Manufactures have come up with several models to fill the gap, ISUZU — MITSUBISH -TOYOTA DYNA — HINO — TATA — HYUDAI – Nissan UD {Swara} — FOTON etc.

 

 

 

 

SANYO DIGITAL CAMERA ISUZU NQR remains the biggest contender in the minibus category especially the 25—29 and 33 seater capacity. General Motors the manufactures of Isuzu has been selling buses across the country for many years and their different modes have worked for Kenyan roads. The availability of genuine and affordable spare parts is also an added advantage to buyers.

 

 

 

 

Hino is making a grand comeback in the passengers transport services. SANYO DIGITAL CAMERAThe 33 seater Hino minibus is giving Isuzu quite a worthy challenge especially in the Manyanga {soaped up} category. With the fancy bodies, it is hard to tell the difference between an Isuzu and a Hino. Although there is still room for improvement, this model has most of the important features that are ideal for Matatu business.

 

 

 

 

CAPITAL,

To own either of the two popular minibuses, you need an estimated capital of 5 million Kenya shillings. You can pay cash or get finance through lenders either a bank or savings and credit cooperative societies.
For cash buyers- the requirements are as follows.
 Chassis/ cabin. =sh 3,502,000
 Manyanga body. = ksh.1.2 {depending in features}
 Registration number plate= ksh15, 000.
 Advance tax @ksh, 720 per seat= ksh 23,760.
 Comprehensive insurance cover = ksh 450,000.
 Music system advanced = ksh. 150,000.
 Sacco registration & tlb license.= ksh. 20,000.00
TOTA L. =Ksh. 5,360,760.

RETURNS
The fare from Rongai to Nairobi is 100 peaks and 50 off peaks- on average the minibus makes six return trips to and from Nairobi. The average income per trip is between 3300— 4000 shillings; for six return trips the crew will collect sh 19,800,00
 Fuel is equivalent to 1000 per return trip—in a day a total of Ksh 6,000 will go to fuel.
 Salaries for the driver and conductor rage between 3,000—- 4000 shillings depending on terms of employment.
 Other expenses are; parking
 car wash
 Sacco contribution-= 500— 1000. Depending on the sacco.
 On average a 33 seater manyanga makes a net income of between 9,000—10,000 per day i.e. after all expenses have been deducted from the gross income including fueling & salaries.
 Most drivers work six days a week and rest on Sunday on average the minibus works for 27 days in a month and makes 270,000.
Monthly expenses include INSURANCE, PARKING FEE and SERVICING.

DURABILITY.
A brand new minibus is more productive in the first three years- during that period it can maintain the target of 9000 Kenya shillings per day; but the income drops in the fourth year by slight margin- of between Ksh.7,000- 8,000. Despite the drop on returns this bus can and will give you service for a minimum 7 years.

MANAGEMENT.
A Matatu owner has the right to employ a trustee/ manager of his choice to run the daily affairs of the van; it is however recommended that investors seek the services of qualified managers/ management agencies. This helps in setting a target which is sustainable and eases the burden for the owner.
1. The agency maintains control and costs incurred by each of the managed vehicle and must record / report to the owner of any malfunction or mechanical problem noticed on any vehicle.
2. It is the duty of the fleet manager to see to it that a file is kept containing all documents related to each vehicle such as Accidents reports, insurance, repair charts, and road licenses.

SURVIVAL IN THIS BUSINESS
For those who want to go it alone, there is of-cause the protection fee. This last bit is necessitated by corruption in the traffic department. It would be unwise not to have a contact person at the police station especially those that man your route of operation. It is hard to survive in this business however you may hate corruption; even when your Matatu has complied with all government requirements. The traffic police department is the regulator and most of them see the industry as their cash cow; there are police officers who will look for reasons or even obscure offense and place it on your crew and this will cost you dearly. It is therefore important to bear in mind that they also have a share of your cake and this might have a very significant role in the success or failure of your investment.
For more information.. wambururu@gmail.com
To book an appointment call: +254 724 384 676

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3 Comments

Posted by on December 8, 2015 in Its life, matatu investment, Matatu matters

 

Tags: , , , , , , , , ,

3 responses to “Cost of owning a 33 seater minibus in Nairobi.

  1. John Moguche

    March 5, 2016 at 11:13 am

    Thanks so much for your information but would like to know the type of business with minimal stress between matatu business and trucking(fh Mitsubishi).
    I am a teacher.
    Thanks.

     
    • wambururu

      March 20, 2016 at 8:34 am

      They fall under transpotation. As in any other investment where profit is the goal, managment and marketing determines the returns.
      What makes matatu investment different is the certainty. Chances are high that the services you are offering are in demand.as opposed to trucking, where you only target business people moving cargo,the demand for passengers transport is already high in most regions.
      If you have good connections with peole/businesses that hire trucks, you’ll most likely make more money than a minibus can ever make depending on who you have a the client. There is less involvement and fewer people to deal with.
      A brand new 33 seater custom made minibus gives you between 270k and 300.000. That is 10—11k per day. Maintenance, road fees, servicing, insurance etc takes 70 or 80k a month.

       
  2. plaoh

    March 6, 2016 at 11:45 pm

    I like your strategies towards this business I’m interested although I’m a form 1

     

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