Currently, over 50 companies are engaged in the investment of automotive industry in Ethiopia, particularly in assembling vehicles starting from the Bajaj up to heavy trucks. According to the Metals Industry Development Institute, local based companies are also investing in the sector, especially in exporting their automotive products to the neighboring countries which is currently showing a growing demand in this respect.
Now, the automotive industry in Ethiopia reached to the highest level, mainly in assembling of electric vehicles. Last Monday, Marathon Motors Engineering announced its first electric automobile assembled in Ethiopia. Marathon Motors presented its first electric vehicle as a gift to the Prime Minister of Ethiopia, Dr. Abiy Ahmed. The company also avowed to continue manufacturing electric vehicles.
Institute’s Communication Director Fite Bekele told The Ethiopian Herald that, although the automotive industry is on its initial level in Ethiopia, the sector’s development is showing significant growth.
Fite stated that currently around 50 companies are engaged in the automotive industry, assembling from three-wheelers up to heavy trucks; and are exporting their products to the neighboring countries in addition to satisfying the local market demand.
In the 2019/20 fiscal year, these automotive companies assembled about 6,900 different types of vehicles and trucks locally amidst many challenges including COVID-19.
In terms of finance, over 751,510,000 birr has been generated from sale of assembly products. Additionally, by exporting heavy trucks to neighboring countries twice a year, Ethiopia earned over 80,600 US Dollars, the director stated.
Locally, higher government officials are mostly using locally assembled vehicles to promote local products and the market at home for local products is growing. This helps the country to save foreign currency and at the same time contributes for the development of the sector particularly in job creation and technology transfer, the director noted.
“Now, as we hear this week from Marathon Motors, Ethiopia’s automotive industry is started assembling electric vehicles, using the latest technological advancements in the sector”, the director stated. As to him, this is a significant development in the sector especially in introducing latest technology transfer.
In addition, this new initiative of starting assembling electric vehicles at home is pro Ethiopia’s green legacy initiative launched to combat the negative impacts of climate change. This sector is new and environmental friendly investment that will help the country’s prosperity journey of building climate resilient economy, Fite said.
He also stated that, since Ethiopia is importing oil with huge foreign currency, electric vehicles will save country’s foreign currency expenditure since it uses only electric charge.
For Fite almost all kinds of heavy trucks are assembled locally with limited amount; and the experts engaged in the sector are mostly youth educated Ethiopians. Hence, this shows us Ethiopia gains access to the latest technologies in the automotive sector, which is growing rapidly in recent years.
According to Fite, access to market in the automotive sector is high both locally and in East Africa. As to him, currently local market companies are exporting locally assembled vehicles to neighboring countries like Kenya, Uganda, Rwanda and Tanzania.
At this time, the share of the locally assembled products in Ethiopian market is still insignificant although it grows from time to time. To make the local companies competitive in the market and to boost their productivity capacity, Ethiopian government recently announced the huge decrease of excise tax rate to encourage the import of new cars, Fite stated.
According to Fite, the recently implemented excise tax rates inspired local companies to develop the sectors development and their productive capacity on daily basis.
Related to facilities to the electric motors and vehicles, Fite said that, access to charge for vehicles is not a major issue since Ethiopia is working to develop its energy access across the country. At this time, access to charge may not be available since there was no such technology in the country. Although few disabled motors are using electric charges, it is easy to expand the charging facility.
Since most accessories are imported, foreign currency limitations are the main challenge to the sector in recent years. In addition, the outbreak of COVID-19 has also its own influence to the sector. To boost the productivity and competitiveness of the local automotive industry, Ethiopian government gives due attention in supporting the sector, he stated.
The Ethiopian Herald August 1, 2020
BY DARGIE KAHSAY
