South Korean car maker Kia Motors signed on Thursday, Sept 23, a contract with Ethiopian firm Beyalab Motors Plc, to establish a car assembly plant in Ethiopia. The firm plans to do the same in other African nations. “It is important to penetrate the African market. We are also looking at the prospects of opening similar plants in Algeria and other countries,” Soon Nam Lee, President of Kia's Middle East and Africa headquarters, told Reuters

The plant which will be situated in Adama, south of Addis Ababa, will produce its first car in January 2017.

CEO of Beyalab Motors, Fidaku Girma, said the plant should produce 3,000 cars each year, of three different models. He added that this number could grow to 9,000 after additional changes are made. Models that will be assembled at the plant include sub-compact Rio and Sportage. The Ethiopian firm will invest 150 million birr (about $6.83 million) into the plant’s expansion.

Ethiopia currently produces around 8,000 commercial cars each year, a fourth of which goes to the local market.

The government of Ethiopia plans to the nation’s car industry one of the largest of Africa, by implementing incentives such as low labor costs and taxes.

Alain Okpeitcha