14 giant car and machinery exclusive agents to Ethiopia formed an association to voice common interests of the rivaling companies
According to Abraham Y. Abegaz, CEO and Chairman of the new Association, the association is formed in order to echo common challenges the industry is facing. It is expected to leverage key issues such as customs on import duties, shortage of hard currency and fluctuation of hard currency.
Abraham noted the price invoices presented to the Ethiopian Revenue and Customs Authority (ERCA) by the importer are being rejected on the grounds of not reflecting the true price of the cars. He furthered the evidence ERCA presents to make its case is basically from the Internet or the manufacturers website. Nevertheless, Abraham argues such will not prove the actual price for the manufacturers assign 18 digit numbers which detail the make and price of the vehicle.
According to The Reporter another task the Association needs to deal with is the new tax levied to cover transportation costs from Djibouti to Addis Ababa.
The government escaped procurements from importers which has raised two major dissatisfactions. The government defends it move by raising price hikes and delay in delivery.Nonetheless, Abraham differs from the government’s position by claiming the move is not a realistic approach to pursue. He notes the real prices for the products can be gathered from the exclusive agents since they avoid middlemen in the business channel.
Abraham further explained delivery might sometimes fail to address the demands of the government on conditions when the dealers and manufacturers follow the newly introduced “just in time” delivery strategy.
The Chairman of the Association also commented on the risk they face when dealing with public agencies for the agencies will not agree to be bound by conditions of exchange rate fluctuations and force majeure. He added, new models are not recognized by the public agencies as quickly as the dealers require.
It is to voice these and other objectives the association came in to being. The Reporter stated an importer can be a member of the Association only when it can prove it has a license from both the Ethiopian government and the original manufacturer.
Currently the Association has included Rolf Gautschi, General Manager of Orbis, Chris De Muynck, Managing Director of Moenco, Ries Engineering and BH Trading and Technical Services as its board members.
Source: The Reporter
