Vehicles are the number one export from Korea to the Horn of Africa, especially in Sudan and Ethiopia. Countries in the Horn have more vehicle imports than exports. Ethiopia imports while Sudan exports the most vehicles. Countries in the Horn had 928,994 registered vehicles in 2014. Ethiopia had the largest number of registered vehicles, 478,244, and a 6% annual growth rate.
New commercial vehicle sales are driven by construction, agri-business and retail sectors and fuelled by the country’s economic growth. Government purchases drive the demand in passenger vehicle sales. In 2015, Ethiopia had seven domestic assembly plants.
New investors in the manufacturing sector in Ethiopia, including automotive, are exempt from paying income tax for five years if:
They export more than 50% of their products or services, or if
They supply more than 75% of their products to an exporter as a production input.
Potential entry strategy for new investors:
Set up an assembly plant in Ethiopia or Sudan focused on exporting.
Transport manufactured or assembled products from Ethiopia via Djibouti or Eritrea. Consider components / associated products: Korean tyre manufacturers Nexen and Hankook are popular in Africa, but currently only have a South African presence.