Motor dealer Marshalls East Africa halved its losses in the six months to September in spite of lower car sales. The auto company reported a net loss of KES50mn in the half year compared with a KES93mn in a similar period last year on revenues that dropped 25.4 per cent to KES99.4mn. The narrowed loss was due in part to a KES29mn reduction in financing costs and lower administrative expenses, which also fell by KES29mn, because of staff cuts. Marshall’s chief executive Sanjiv Shah said the fall in sales was due to inadequate supply of vehicles from its dealers and a bearish run in Kenya’s auto industry. “We experienced constraints in the supply of vehicles especially KIA brands. The supplier met only half of what we had ordered and this slowed down sales,” Mr. Shah said. The company, he said, was looking at beefing up its vehicle franchises from early next year to return to profitability. Since it lost the flagship Peugeot franchise in 2007, the Nairobi Securities Exchange (NSE) listed Marshalls has struggled to grow its sales, made worsen by boardroom wrangles. Its full year sales dropped from KES1.3bn in 2007 to KES604 and KES263 in 2011 and 2009 respectively. The firm now relies heavily on India’s Tata and KIA, a South Korean vehicle manufacturer that supplies it with saloon cars, pick-ups, and sports utility vehicles (SUV). It made a net “paper profit” of KES181.5mn in the year to March compared to a loss of KES344mn helped by the waiver of a KES401mn loan borrowed from Kenya Commercial Bank by businessmen Ketan Somaia, who lost the battle for control of the loss making auto firm to tycoon Kamlesh Pattni. Directors and executives friendly to Mr. Pattni successfully went to court and argued that the loan was issued irregularly at a moment when Marshalls did not have a board to approve the monies. Mr. Pattni said he bought a controlling stake in Marshalls estimated at 65.5 per cent but Mr. Somaia had refused to transfer the shares, prompting the court to rule in his favour last year. This year, Mr. Pattni reduced his stake to 50.5 per cent. The shareholder spat saw Marshalls end up with six CEOs in three years, a turnover that has hampered the firm’s ability to develop long-term strategies and hire top talent in the increasingly competitive auto sector. Besides the board wrangles, a thin product line and sluggish sales in Kenya’s new vehicles market has helped rivals such as General Motors, CMC, and Toyota much its market share, which has seen its sales fall leading to a deepening of losses since 2007. Marshalls terminated the Peugeot franchise in 2007 ending a 47-year partnership. Investors have taken notice as its shares have become the least sought after at the Nairobi Securities Exchange. Its share price stood at a year low of KES11.40 on Friday, having shaved off 20 per cent over the past six months and has remained unchanged in the past month due to non-trading. Marshalls East Africa is betting on the luxury and commercial trucks market with new models from Ashok Leyland, Audi, and Force Motors to return to profitability.