China's Lifan Industry Group Company, one of China's largest private manufacturers of motorcycles and passenger cars, has announced plans to launch a new assembly plant in Ethiopia next year with an annual capacity of 1,500-2,000 vehicles at a cost of up to US$5 million.
The company already operates an assembly operation in Addis Ababa, and the new plant would double capacity. The deputy general manager of Lifan in Ethiopia, Roger Tian, said demand for Lifan cars had been growing at an average of 30% for the past three years, and the company anticipated a 40% to 50% rise in demand next year.
He said Lifan accounted for 70% of the car-assembly in Ethiopia, and had sold 1,200 units in the last financial year. He said Lifan benefitted from the affordability of its models, and it planned to introduce three more varieties to Ethiopia next year. Mr. Tian said that 80% to 90% of Lifan parts were imported from China but noted that the company planned to use locally produced engines, seats and other components in the future.
Lifan was the first company to assemble vehicles in Ethiopia in 2007 in partnership with Holland Car, but has been operating independently since 2009. Ethiopia now has nine vehicle assembly companies and the government wants it to become an important car-production hub in future. It currently assembles passenger vehicles and pickup trucks with engine capacities of up to 2.8 liters as well as buses, tractors and trailers, with a growing volume of parts also being manufactured here for all vehicle types.