Automotive Industry on Spotlight Requiring Hard Push


Following the stimulated economy and the improving purchasing capacity of citizens the automotive industry has become spotlight in the country looking hard push for better performance, said the Metal Industry Development Institute.

Institute Corporate Communication Director Fite Bekele told The Ethiopian Herald that since the first Growth and Transformation Plan the industry has shown progress after long sluggish move for close to half century.

He said currently, some 16 industries engaged in vehicle assembly and vehicle body parts production are operating in the country with an aggregate capacity of producing 45,900 vehicles annually estimated at 31 billion Birr. Besides, the current capacity has also enabled the industries to produce 30,000 Bajaj worth 3.3 billion Birr.

However, the director said the industries have produced vehicles and vehicles body parts amounting to close to five billion Birr out of the target 8.8 billion Birr in the just ended fiscal year.

Along with its labor and capital intensive nature, low customers’ interest to buy local products, the limited finance, management and technological capacity, market and input, power and land supply as well as shortage of foreign currency, are the major challenges the industry faces, according to the director.

In fact, over the last five years the tendency to buy local products has been improving. These days, public offices are buying local products mentioning a case in point the increasing public transport buses and office cars in the country.

Fite said some 43,723 vehicles have been imported with 30.2 billion Birr in the just ended Ethiopian fiscal year, in which he said an indication for increased demand in the country.

Despite many challenges, the industry is attracting investors, creating job opportunity and decreasing the spent for importation, he said.

Efforts are underway to upgrade the outstanding ones and brining the new investors to the industry, he said, and adding the institute has been engaged with universities offering engineering fields. In addition, the institute is playing due role in forging sound partnership between industries and universities.

The director said the institute is responsible to expand investment, enhance product and productivity as well as marketing capacity of the metal sub sector. To this end, the institute has already launched capacity building twining program with Indian Council of Scientific and Industrial Research.

Through this partnership, the director said the institute would enable train technologist here and abroad at masters and PhD levels in the coming three years.

According to him, at the end of GTP II the industry is expected to generate 75 billion birr. As half of the plan period elapsed, the status of the industry is far behind the plan.