Generational success: Growing a used car dealership into a diverse business group
This is an excerpt from PwC’ Kenya’s Family Business Survey 2018, titled The Values Effect. It can be found here. The article was adapted for publication.
“Our engine is our people,” says Adil Popat, Executive Chairman, Simba Corporation. “I have been blessed to work with good Kenyans and build a stable and sustainable business.”
Simba Corporation was founded in 1948 as a used car dealership on Koinange Street in Nairobi’s central business district by the late Abdul Karim Popat. “My father was a hardworking and disciplined man,” reminisces Adil Popat, Abdul Karim’s son and a second generation business owner. “He worked long hours and regularly took the train 300 kilometres away to Eldoret, a town in the northern part of Kenya, to buy used vehicles for resale. He would diligently travel, write multiple books of accounts for his clients, while making time to attend the mosque every day.”
From those humble beginnings, Simba Corporation now has an annual turnover of over US$100 million and employs about 1,300 people. It operates in the motor vehicle, hospitality, fleet management, car rental, real estate, financial services and power systems sectors.
How did the business grow to what is is today?
Since 2007, Simba Corporation has experienced great change and diversification. The group grew its auto dealership portfolio with the introduction of BMW, Mahindra and Renault franchises as well as a separate division, Africa Fleet Management. It has also ventured into hospitality with the building of the Olare Mara Kempinski Camp, the Villa Rosa Kempinski and Simba’s own branded hotel, the Acacia Premier in Kisumu. This propelled Simba wholeheartedly into the Kenyan hospitality sector.
Regarding expansion, Popat remains cautious. The group is on the lookout for new opportunities in the region, but the management team keeps a clear eye on risks as well as the expected benefits. “We prefer creating partnerships with strategic investors when the time comes along and according to Simba’s four pillars: motor vehicles, hospitality, real estate and financial services,” he says.
“Change is inevitable,” Popat continues. “Especially for the motor vehicle franchises.” He took over when turnover was modest and operations still small. These have grown steadily over time amidst fierce competition from other brands.
What does the future hold?
Popat has exposed his children to the financial, legal and strategic aspects of the business in recognition of the important role they play in influencing the group’s future. He is keen to reinforce that talent in the group is supported and hard work appreciated and rewarded. However, the next generation should not be forced to join a family business but should earn their place in the business based on their skills and interest.
He says that the family constitution is clear about the involvement of spouses and the wider family in the business. Where gaps would be cited in running the business, it is also clear at what point consultants would need to be engaged. “I would want my family working together and living harmoniously, and find prestige in working for the family business,” he adds. He is realistic, however, and mentions that there are mechanisms in place for exit if family members so wished.
What lessons can we learn from this family business?
Popat reinforces that the ethos and spirit of Simba Corporation is underpinned by its core value: aspire. This value should resonate with all those that lead, work for, partner with, and do business with the group. He encourages the team to articulate their personal aspirations and to provide input into the group’s aspirations as well. He believes that alignment of the company values with people values is fundamental for greater success.
Integrity is also a key pillar for the group. Simba Corporation strives for transparency and honesty in running the business and Popat says that he is not averse to “growing the group slowly and steadily” for the sake of doing the right thing. Finally, he recalls how he and his late father related to each other. He says that they had candid conversations about whether it was necessary to keep expanding, yet they were already so successful.
He remembers responding and envisaging a legacy that transcends the current generation, of building a business that was viable well into the future, and one which contributes good to the society. “I am keen that the Simba name resonates with good work and projects that are visible in the marketplace,” he concludes.