Friday, April 19, 2024
BusinessLifan proposes to export coffee, sesame to alleviate Forex shortage

Lifan proposes to export coffee, sesame to alleviate Forex shortage

  • Unveils new brand, targets high-end vehicles market

Attempting to overcome shortages of hard currency, which is debilitating the operations of Lifan Motors in Ethiopia, the Chinese carmaker reveals intentions to join the agricultural commodity export business focusing on coffee and sesame as potentially tradable commodities, The Reporter has learnt.

During the 4th global distributors’ convention which took place in Lijiang city, Yunnan Province of China, last week, officials of Lifan Motors told The Reporter that the company is in view of entering into the commodity export market in an effort to alleviate hard currency shortages. The Lifan Industry Group, which operates in the import-export, construction, real estate, finance and trading in addition to its automotive business, is said to be looking into other potential areas of export from Ethiopia Mu Gang (also Mark Timber), president of Lifan Group of Lifan Motors, told The Reporter.

There is a possibility of exporting as many as 100 containers a month given the huge demand for coffee and sesame in China; but details are yet to be figured out, Lifan executives said.

Lifan Motors has been looking into markets such as Sudan and Egypt for its automotive operation in Ethiopia. However, the company halted its plans due to cost of production and lack of hard currency. The company said that shortage of hard currency have placed limits to its capacity of importing semi-knocked down parts of vehicles from its headquarters in Chongqing municipality, Southwest of China, for its car assembly plant in Ethiopia.

The assembly plant Lifan has leased in the Eastern Industry Zone in Dukem, according to Frank Lau, manager of import and export Co., Ltd at Lifan Industry Group Co., Ltd, has a capacity of assembling 2,000 units per year. However, due to lack of hard currency that capacity of production is limited to only 500 units. Potential job opportunities that could have been created are estimated to be 200; nevertheless, it remains limited to 50 jobs due mainly to the foreign currency shortage, Lau said.

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Lifan car buyers in Ethiopia as well are echoing frustrations over accessibility of spare parts in local market. Anteneh Trilo, general manager of the Ze-Lucy Taxi Owners Association, which is operating some 800 units of Lifan meter taxicabs in Addis Ababa, says that many of its members are facing shortages in supply of spare parts and also receiving less satisfactory after sales services from the assembler. 

Both Andrew Cui, after sales service director, and Lau reacted to the issues raised by Anteneh. Both cite 10 containers full of spare parts, worth USD 10 million and destined to Ethiopian, currently stranded in China due to Forex shortages in Ethiopia. Yet, inaccessibility of hard currency couldn’t make it possible to ship the spare parts to Ethiopia; and that it is crippling the day-to-day operations of Lifan factory in Ethiopia, the managers have noted.

Despite challenges in Ethiopia, the conglomerate claims that its automobiles have so far been exported t0 40 countries with more than 500 marketing points all over the world. It also runs seven assembly plants in Russia, Azerbaijan, Myanmar, Iran, Ethiopia, Uruguay and Iraq. In Brazil, Ethiopia and Russia, Lifan Motors has been the top-selling Chinese auto brand. The officials also noted that 2000 custom-made taxicabs in Ethiopia are serving as Uber style taxies in Addis Ababa.

The Ze Lucy Meter Taxi SC, a major buyer of Lifan taxicabs, was recognized as best customers for its purchase of 1,000 units, last year. According to Anteneh, there is a room for additional purchase of 1,000 units in the foreseeable future.

In its eight years of business in Ethiopia, Lifan Motors has assembled and sold some 6,000 units and plans to sell 1,000 units, next year. Further expanding in Ethiopia, the company is currently on a move to secure a plot of land in Addis Ababa to erect its own headquarters which is expected to serve as a showroom and after sales shop.

Following a recent directive which restricted the use of imported high-end vehicles for government officials in Ethiopia, Lifan Motors is looking for potentials to supply cars such as its latest X80 models which officials of the group claim to be suitable for authorities. The X80 has a 2.4 CC and fuel economy of 12 km/hr per liter traveling capacity. The projected retail price is expected to be somewhere around 1.2 million birr. 

Lifan also unveiled its new and representative third-generation vehicle, a utility-type and urban style SUV—Lifan X70—which made its global appearance during the event. It is made public that the third-generation products from Lifan include the domestically launched Lifan Marvell (M7- 7 seat family type SUV), Lifan Xuanlang (7-seat urban and family type MPV), and Lifan X80 (7-seat family type SUV). Second-generation Lifan 620, Lifan 820 and several electro-mobiles have also been displayed. Panda Auto model is a new trending electric car getting popular in Chongchenq, whereas the X70 model is expected to be introduced to the Ethiopian market within the coming four months with possible retail price of nearly one million birr. Convening dealers at the conference with the theme “Start new and act high,” activities such as test driving, mountain climbing, factory visits and the likes were part of the week-long event.

Mu Gang said that based on export forecasts, the total car production in China is expected to reach 50 million units in 2025, out of which 40 million are to be used locally and the 10 million destined to the export market. Lifan’s export capacity is estimated to be 3 percent of the overall china’s car export industry, which represents 300,000 units a year. In addition to the A level SUVs, Lifan’s urban cars production line is geared to manufacture hybrid and eco friendly electric vehicles, where its R&D is currently tasked in developing models suitable for energy and environmentally friendly vehicles. Lifan has begun a tradition of gathering global dealers and during the fourth conference some 90 dealers from across 17 countries were gathered in the ancient city of Lijiang for the fourth round this year. 

Lifan joined the assembly business in Ethiopia in 2007, establishing a partnership with Holland Cars, now defunct first-ever carmaker in Ethiopia; but the two have ended their business ties on bad terms in 2009. Since then, the carmaker stayed in Ethiopia as Lifan Motors. However, Holland Cars was later declared bankrupt and Tadesse Tessema (Eng.), the owner and founder, fled the country. Currently, Lifan operates an assembly line at the Eastern Industry Zone in Dukem Town together with a rented show room around Addis Ababa Bole International Airport.

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