One of the leading motor vehicle companies in the country, TATA Africa Holdings, faces closure of its Naivasha branch following a financial row with one of its main dealers.
The company, whose headquarters is in South Africa, has been accused of failing to pay millions of shillings to Dragon Motors, the company’s dealer in Naivasha, Narok and Nyandarua counties.
This came as the dealer’s salesmen went on strike demanding more than Sh3 million in commission arrears for the sale of about150 units in the last two years.
Addressing the media, Dragon Motors managing director Evans Chege said TATA had flouted the contract terms with them by delaying payment of commissions to the dealer despite selling tens of motor vehicles and their spare parts monthly.
Chege claimed the Dragon was awarded as the best dealer in the region last year but despite their efforts, they were yet to pay salesmen, which he said had adversely affected sales of the company’s brands.
“We have been selling more than 100 units every year but this year we have managed only three because of failure by the new TATA management to settle their debts,” he said.
He said they were planning to seek legal redress in the next two weeks if the company, which has eighteen branches countrywide, fails to clear its debt.
Dragon Motors senior sales manager Geoffrey Gitahi said they have been forced to lay off some of their staff due to non-payment by the motor company despite growing demand for the brand among farmers in Naivasha, Narok and Nyandarua.
Contacted on phone, TATA MD Naresh Leekha, admitted that there was a row between the company and the dealer but said TATA would resolve the issue soon.