Prime Minister Abiy Ahmed has announced numerous reform plans, including plans to loosen the state’s dominance in key sectors, in efforts to attract investor interest and boost growth. Ethiopia’s automotive industry presents a long-term opportunity for first movers.
Key take-outs from this report
- With its limited automotive manufacturing capacity, Ethiopia continues to import from various countries typically through the port of Djibouti
- Although passenger vehicles are the most expensive vehicle imports, growth is expected to contract, while commercial vehicles are expected to expand in the coming years, owing to infrastructure development projects.
- In efforts to expand the automotive manufacturing industry, Ethiopia launched a vehicle manufacturing and assembly plant, Bishoftu Automotive Industry (BAI).
- Ethiopia aspires to become Africa’s largest car manufacturer through tariff protection and by increasing the number of local assemblers with extensive support from Chinese companies.
- Vehicle production has increased recently, due to local assembly investments such as Hyundai’s first assembly plant launched in Addis Ababa at the beginning of 2019.
- Ethiopia recently became the third country in SSA to sign a memorandum of understanding (MoU) with Volkswagen which seeks to seize opportunities in vehicle assembly facilities and localising automotive components in Ethiopia.
- Ethiopia has a growing middle class. This will see the demand for motor vehicles growing in the coming years
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