The assembly plant for Addis Car was inaugurated by Mesfin Industrial Engineering in collaboration with Geely International Corp, the China based manufacturer of Geely cars, on Saturday, June 18, 2011.
It would be the company’s first time to assemble automobiles for the domestic market.
The plant is located on the same premises as Mesfin Industrial’s truck assembly plant in Mekelle Town, 780km north of Addis Abeba. The company previously assembled trucks like the Russian made Kamaz.
Following the import of 10 million Br worth of machinery, the plant has five completely knocked down (CKD) assembly lines for Geely cars, enabling it to assemble five automobiles at a time.
The plant has the capacity to annually assemble more than 800 Geely models but is to assemble only, according to the agreement. The cars will be equipped with 1.3cc engines, double airbags, and an anti-breaking system (ABS).
Mesfin Industrial, which has a capital of 260 million Br, obtained the exclusive rights to import, distribute, and service Geely cars in Ethiopia in August 2010, through an agreement with Geely International, which was established in Shanghai in July 2002.
The previous exclusive dealer of Geely cars was Paul Ries & Sons Ethiopia.
Mesfin also has the sole distribution rights in neighbouring countries where Geely does not have a sole agent, such as Sudan, Kenya, Somalia, Djibouti, and Eritrea.
“The substantial technology transfer from Geely International was one of the reasons we decided to assemble the cars,” Yusuf Adamnur, manager of sales and promotion at Mesfin Industrial, told Fortune. “It is one of the leading companies in the production and export market.”
Geely International, which has at least eight factories in China, produces nine models of Geely cars and has the capacity to manufacture 42,000 cars annually.
By February 2011, 13 vehicle and tractor assembly plants have been licensed and started operation, according to the Ethiopian Investment Agency (EIA). Out of the total, 10 are foreign owned, according to the agency.
Mesfin Industrial, which was established with a capital of seven million Birr in September 1993, is among the few local companies looking towards car assemblies in a bid to provide cost effective vehicles in Ethiopia.
The company is offering prospective buyers a deal whereby they can purchase the car with a 50pc down payment after which the balance can be paid upon them receiving the car.
“Some brokers and drivers prefer to pay more for second-hand cars of certain brands instead of buying new models of other brands, which would be a challenge for us,” Yusuf told Fortune.
This phenomenon was confirmed by Girum Bekele, a car and house broker.
“Many buyers are attracted by lower fuel consumption, lower prices, and strong and durable cars that can easily be resold,” he told Fortune.
Mesfin Industrial imported 34 completely built units (CBUs) of Geely cars to test its appeal to middleclass customers at the end of 2010. The cars were sold out at 285,000 Br a piece, which encouraged Mesfin Industrial to install the assembly plant, according to Yusuf.
The company recently started exporting semitrailer fuel tankers with 45,000-litre capacities at a cost of around 48,000 dollars each.
Mesfin industrial is one of the company owned by the ruling party EPRDF under the name of EFFORT Group (Endowment Fund For The Rehabilitation of Tigrai )