Somali Magazine October 13, 2023- Lada- a leading Russian carmaker has become the latest in a growing list of international automakers preparing to enter Ethiopia’s fledgling automotive market which has one of the world’s lowest car ownership rates.
This new entrance by Lada will see them jointly partner with local Bazra Motors.
Already there are estimated projections that the new plant will produce 5,000 vehicles annually from an assembly plant to be established in the town of Kombolcha, located in the country’s conflict-torn northern Amhara region.
Ethiopian ambassador to Russia Cham Ugala Uriat, said that the new Lada plant will export to neighboring countries including Kenya, Somalia, Sudan, and South Sudan.
Over the last few years, Ethiopia’s government has introduced a range of tax-friendly incentives to encourage car makers to open local operations. Companies including KIA, Lifan and Chery are already making cars. In May, local partners of Japanese automaker Nissan announced it was looking to set up an assembly plant in the country.
Ethiopia — Africa’s second most populous nation with some 120 million inhabitants — had around 1.3 million cars on the road in 2022 according to its transport ministry.
That translates to one of the lowest car ownership rates in the world at about 2 cars to 1,000 people. Its auto market is dominated by secondhand cars, many of which are Japanese brands like Toyota. Locals complain that the government’s high import tariffs, totaling over 200%, keep the price of used cars very high and out of reach for most ordinary Ethiopians.