The price of new automobiles has dropped significantly in the last three weeks, putting the automotive industry in the midst of another dramatic shift in events.
The change in price comes just two months after the central bank banned the imports of vehicles, along with 37 other items, with letters of credit.
The ban made it impossible for businesses that imported new cars to take advantage of the low tax that was put in place to reduce pollution from old cars.
Experts expected the price would increase, as the ban means low supply, which could lead to an increase in the cost of vehicles. “Some vehicles see a decline by as much as half a million birr,” said Azmeraw Girma, a broker working around the Mesqel Flower area.
The most sought-after car in the market, the Suzuki Dzire 2022, is now available in the car market for 1.8 million birr. It is a decrease from the 2.3 million birr observed before the ban was placed by the central bank.
The Suzuki Swift 2022, which was being sold for as much as 2.8 million birr, is now being sold for two million birr, according to market insiders. The same change has also been seen in the used vehicle market.
Vehicles like the Toyota Yaris (the automatic ones) have seen their prices decline by over a quarter of a million birr and are now being traded for 1.2 million birr. “Surprisingly, even the price of cars like Woyane (injection) dwindled from 800,000 birr to almost 650,000 birr now,” said a car retailer in the Haya Hulet area, attributing the price change to the falling demand for vehicles in the last two months.
“I don’t think it is related to the ban. For instance, most of the buyers of new cars were bankers. They have somehow been doing so lately, as banks are not approving large amounts of loans as they have in the past,” added the retailer.
The price of the Toyota Vitz, another popular car on the market, saw a significant decline too. It has dropped from 1.5 million birr to almost one million birr in the market.