ETHIOPIA AUTOMOTIVE AFTERMARKET MARKET

Ethiopia Automotive Aftermarket is projected to grow at robust CAGR in the coming years owing to the domination of imported second-hand vehicles and the government initiatives to reform the industry.

Major Ethiopia Automotive Aftermarket Drivers and Emerging Trends

The government established a National Transport Council to lead sector reforms which results in the formulation and approval of a national transport policy, a national logistics strategy for 2020-2030 along with a 10-year strategic plan for the transport sector. The reform agenda facilitates expanded private sector involvement in the operation and development of railway and port, road infrastructure, as well as logistics and maritime services. In the next few years, both international and local private investors may participate in the transport sector through complete private ownership, partnerships with the government or local entities, and through public-private partnership models.

Ethiopia automotive aftermarket and vehicle market is largely dominated by imported second-hand vehicles especially commercial ones. Commercial vehicles were the country’s second-largest import category in 2022, totaling USD 875 million. Interestingly, commercial vehicles also stood as the country’s top automotive export for the year. However, with only two cars per 1,000 people as of 2015, Ethiopia boasts the lowest motorization rate globally. Recent estimates suggest that there were 210,000 vehicles in use in the country which comprises 125,000 passenger vehicles and eighty-five thousand commercial ones. The Ministry of Transport reports that about 84 percent of the market consists of passenger vehicles with commercial vehicles comprising the remaining 16%.

In recent years, prominent global automotive firms have undertaken market scoping studies to determine Ethiopia’s suitability as a manufacturing base. Yet, the insufficient large-scale investments by automotive companies in Ethiopia can be attributed to the relatively small market size. Despite certain assemblers sourcing components like tires locally, the country currently lacks a specified mandate for local content requirements. Several assemblers have mentioned that they were informed about a suggested 30 percent of local content requirement to qualify for the associated tax incentive tied to local manufacturing, but no formal agreement has been documented between the state and assemblers.

Despite being the second most populous country on the continent, Ethiopia still presents a relatively small overall automotive aftermarket size in the near to medium future, affecting both current and future producers and assemblers. Nevertheless, Ethiopia’s robust governmental support for industrialization and the growth of supporting industries, combined with a large and cost-effective labor pool as well as significant investments in both economic and physical infrastructure, could potentially place the country in a favorable position for automotive manufacturing over the long run, to cater regional and local markets with economically competitive vehicle parts.

However, high tax rates in the country diminish vehicle affordability particularly considering the low-income levels of the population, thereby constraining the country’s automotive aftermarket expansion. Addressing this challenge requires industry stakeholders to champion the development of vehicle financing initiatives aimed at fostering increased vehicle ownership. There is also a need to revise taxes to include vehicle age thereby creating incentives for the purchase of domestically produced vehicles.

Various prominent players within the market include Bishoftu Automotive Industry (BAI), Monaco Automotive Engineering, Marathon Motor, among others.

By replacement components, the market is segmented into battery, body parts, tire, wheels, brake parts, among others, with the tire category is projected to lead the market as the largest segment. Suppliers in the aftermarket replacement parts industry also provide various items including accessories, tires, lubricants, and other components.

Various prominent players within the market include Bishoftu Automotive Industry (BAI), Monaco Automotive Engineering, Marathon Motor, among others.

Segments covered in the Report:

The Ethiopia Automotive Aftermarket Market has been segmented on the basis of vehicle type, replacement part, certification. Based on the vehicle type, the market has been segmented into commercial vehicles and passenger vehicles. By replacement parts, the market is segmented into tire, battery, brake parts, filters (air filter, oil filter, others), lighting components, electronic components, lubricants, clutch parts, engine components, (timing belt, spark plugs, others) & others. Based on certification, the market has been segmented into genuine parts, certified parts, counterfeit parts, others.

Market Segmentation

Ethiopia Automotive Aftermarket by Vehicle Type

• • Commercial Vehicles
  • Passenger Vehicles

Ethiopia Automotive Aftermarket by Replacement Parts

• • Tire
  • Battery
  • Brake Parts
  • Filters 
    • Air Filter​
    • Oil Filter​
    • Others​
  • Lighting Components​
  • Electronic components​
  • Lubricants​
  • Clutch Parts​
  • Engine Components 
    • Timing Belt​
    • Spark Plugs​
    • Others​
  • Others

Ethiopia Automotive Aftermarket by Certification

• • Genuine Parts
  • Certified Parts
  • Counterfeit Parts
  • Others