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Hyundai opens an Assembly Plant in Ethiopia

by Milicent Atieno
An employee assembles a Hyundai car in Hyundai Marathon Motor assembly plant on the outskirt of Addis Ababa

The South Korea-based Hyundai Motor Co. has set up a 10,000 vehicle-per-year assembly plant in Addis Ababa, Ethiopia. The plant was officially opened on Thursday, making it the company’s first plant in the East African market.

The popularity of Second-Hand vehicles in East Africa

Though as a country, Ethiopia has one of the lowest car ownership rates in the world; two cars per every 1,000 people according to a Deloitte 2014 report. The country sits in a region where second-hand cars are popular.

Ethiopia’s neighbors like Kenya, Uganda, and Tanzania have mostly second-hand vehicles on their roads. Hyundai is betting on locally assembled cars being affordable than imported fully-assembled vehicles, and that will attract users from the second-hand market. Since the locally assembled cars would be affordable.

Importing fully assembled cars typically attract high taxes making it a privilege of the affluent in the society. The rest have to make do with imported second-hand cars, Hyundai is targetting this market by giving them a new first-hand car at affordable prices.

Hyundai has partnered with former Olympian winner turned businessman Haile Gebrselassie. The former athlete during a press briefing said the plant will be assembling passenger hatchback cars and trucks. Though there will be a certain percentage of cars rolling out of the plant that will be imported.

This plant is big enough (to assemble) for Kenya, Ethiopia, Somalia, Djibouti, Eritrea, and Sudan,” said Gebrselassie.

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Already, Ethiopia produces about 10,000 vehicles, which also includes commercial cars. Stats show that in 2017, the country imported 40,000 cars. There are already some Chinese brands like FAW, Geely, and BYD in the country.

According to Hyundai CEO Won Hee Lee, the company was drawn to Ethiopia because of the country’s growth. Ethiopia is among the fastest growing economy in Africa for about a decade now.

We have good opportunities in Ethiopia. We believe the economic growth in Ethiopia will be faster than any other country in middle Africa,” said Hee Lee during the Hyundai assembly plant inauguration ceremony.

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