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A worker assembles micro vans Lifan Motors Ethiopia The company has the capacity to build 3,000 vehicles per year in Ethiopia with one change production Chen Weihua China Daily.
The Chinese automaker has ambitious plans to use its new Ethiopian factory to help drive expansion in other markets of East Africa.
In an open field outside of a factory in the industrial area of eastern Dukem, about 37 km south of the Ethiopian capital Addis Ababa, Alemayehu Gizachew testing a new micro van.
The Deputy Director of Lifan factory owned by Chinese Motors made sharp turns, and then hit the brakes, he was satisfied with the performance, he said.
At the front of the building are dozens of new models Lifan, fresh from the assembly line.
But inside the new plant 4 to 5 million, inaugurated by Ethiopian President Mulatu Teshome last May, the scene is less busy than expected, with only a dozen workers on the assembly line.
Lifan Motors has the capacity to build 3,000 vehicles per year in Ethiopia, on the basis of a single production shift.
two shifts that could raise 5,000 vehicles, according to Liu Jiang, general manager Lifan Motors Ethiopia, also known as Yangfan Motors PLC.
However, the Ethiopian sluggish auto market means that Lifan won t reach full capacity until fundamental changes occur.
About 90 percent of cars sold in Ethiopia each year are second hand imported from industrialized countries for most.
Only about 1,500 new vehicles sold in the country every year, and of those almost half of Lifan cars, according to Liu.
But despite this, Liu is optimistic about the market outlook in the long term business, not only here in the second most populous country in Africa, with 94 million people, but also in neighboring countries such as Kenya .
Lifan Motors Founder Yin Mingshan also expressed the same optimism at the inauguration ceremony in May.
Liu believes that if the Ethiopian government takes measures to curb the market of imported used vehicles, it will provide significant opportunity for new automotive producers such as his.
If we are fortunate to have 20, 30 or 40 percent may be an automotive market-10,000 more each year, it's not bad, he said.
The market potential could be even more, he adds, given that GDP grew in the country in double digits for over a decade and is still growing by about 8 percent.
Listed on the Shanghai Stock Exchange, Lifan says it is ready to develop in Ethiopia and use it as a gateway to other markets in East Africa.
It has an ambitious plan for the local production of 50 to 60 percent of the parts it needs in five years.
Liu compares the atmosphere in China as early opening and early 1980s economic reforms.
If more preferential policies are introduced to attract foreign direct investment, and rapid economic growth is maintained, the potential is enormous, he said.
Only 32 years old, the ambitious CEO has worked in the overseas operations of the company for a decade, including Brazil, Thailand and Egypt.
He believes that there is also a huge potential market that Lifan Motors dealer can explore Africa.
However, the rigid fiscal regime of Ethiopia and inadequate infrastructure pose the greatest challenges.
The first railway connecting the capital, Addis Ababa, to the nearest port in Djibouti, where 70 percent of trade between landlocked Ethiopia is still two years to complete clearance operation still takes ages.
Consequently, cheap labor in Ethiopia does not necessarily mean low cost for Lifan cars assembled in the country.
Instead, the high tariffs and high consumption taxes have often been assembling cars from imported parts, as in the case of Lifan Motors, more expensive than imported cars.
Take, for example, the Lifan X60, a compact SUV is sold for around 80,000 yuan 13,000 in China, but in Ethiopia, the price is driven up to 200,000 yuan because of various duties and taxes.
Liu is optimistic the situation will improve because the Ethiopian government is eager to align with the policy of the Chinese automotive industry, but it still does not know exactly how it will be, or how long it might take.
Discussions on reining in the used car market were imported in progress for at least five years.
the Lifan cars have already started winning government contracts last for 125 vehicles, and among the 300 taxis serving Addis Ababa Bole International Airport, 80 are Lifans.
In Ethiopia, the company employs 160 people, including seven Chinese, assembly and sale of 11 models.
Liu admitted that, despite the relatively good wages, labor laws of Ethiopia, which promote the work more than the Chinese equivalents, often became a challenge.
At the assembly plant, director of the Factory Assistant aged 36 Gizachew was an official car maintenance service of the government before joining Lifan Motors there are five.
He said it is a good company and added that the cars assembled in Ethiopia are increasingly popular locally.
Ambachew Gebiyes, a head of 30-year-old team in charge of nine workers at the plant, also said the pay is good, as are the efforts of the company to corporate citizenship.
Each Lifan cars sold in 2013, for example, 15 300 birr was given to charity.
Liu door seems proud that he speaks of how former Ethiopian President Girma Wolde-Giorgis Lifan executives invited to attend her birthday party at the presidential palace to express his appreciation for the work of charity, just before that he resigned in October.
Lifan is also involved in other charitable work, such as planting trees, helping to build roads and by making educational materials donation to 400 orphans and elderly, all underscoring its long-term commitment to the Ethiopian market, Liu said.
As President Mulatu Teshome opened the new plant in May, he was joined by two disadvantaged Ethiopian children who had received help from the company by an Ethiopian charity, the Association for the Development Mary Joy.
interest in early Lifan engine on the local market was also highlighted by its partnership with Holland Car, a joint venture created in 2005 by engineer Tadesse Tessema, an Ethiopian company and a Dutch company Trento Engineering BV The assembled the Lifan 520, a medium known family sedan locally as Abay, meaning Nile blue.
However, the partnership broke up after two years Liu, general manager Lifan Motors Ethiopia, said that the result was a difference of opinion on the development of the company.
While Holland car went bankrupt this year, Lifan Motors, listed on the Shanghai Stock Exchange, has built its own operation in Ethiopia, he is poised to grow in the country and make Ethiopia a gateway to other markets of East Africa it has an ambitious plan to locate about 50 to 60 percent of its parts in five years, according to a report.
Meanwhile, several other Chinese automakers, such as BYD, Chery and Geely, have also taken up in Ethiopia.
Lifan made to step up to the executive floor, Lifan, foot, business.
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