In a recent interview with Capital’s Groum Abate, Francis Agbonlahor, Managing Director of Inchcape Africa and the Motor & Engineering Company of Ethiopia Limited (MOENCO), shared insights into the company’s six-decade legacy in Ethiopia’s automotive industry. As a subsidiary of Inchcape PLC, a prominent global player in premium automotive distribution, MOENCO has navigated various challenges, particularly in the face of foreign exchange constraints impacting the sector. Agbonlahor discussed the company’s strategic initiatives to adapt to these economic hurdles, its commitment to sustainability through the introduction of electric vehicles, and the significant contributions MOENCO has made to Ethiopia’s socio-economic development. This conversation sheds light on the evolving landscape of the automotive market in Ethiopia and MOENCO’s pivotal role in shaping its future.

Capital: Can you describe the current challenges MOENCO is facing regarding foreign exchange availability for importing vehicles and parts?

Francis Agbonlahor: MOENCO, a company of Inchcape, the leading independent global automotive Distributor, has been a trusted and longstanding partner in the Ethiopian automotive market for over 60 years. Our scale and long-term experience enable MOENCO to navigate complex macroeconomic environments, including the foreign exchange challenges. We have consistently maintained strong partnerships with financial institutions and external stakeholders, enabling us to respond to market opportunities and challenges. Our deep market expertise and proactive approach have allowed us to stay resilient, mitigating the impact of currency constraints. By leveraging our extensive local knowledge and operational capabilities, MOENCO continues to utilize available resources efficiently, to deliver value and excellence for our customers.

Capital: How have foreign exchange shortages affected MOENCO’s operations and ability to meet customer demand?

Francis: The foreign exchange challenges impact the entire economy including the automotive industry, but we’re encouraged by key policy changes and interventions aimed at improving the availability of foreign exchange that would support local businesses and broadly create positive impact on the overall economy. MOENCO’s robust operational framework and strong market presence have been pivotal in meeting the needs of customers. We own and operate ten strategically located branches across Ethiopia, complemented by an extensive network of about 20 authorized dealers. This expansive coverage enables us to serve a wide range of customers, even in remote areas, ensuring a consistent and reliable supply of vehicles, service and genuine spare parts. Through our strategic partnerships and agile response to market dynamics, we have continued to meet customer and stakeholder needs, strengthening our position as market leader in the Ethiopia market.

Capital: What strategies is MOENCO implementing to mitigate the impact of foreign exchange constraints on its business?

Francis: MOENCO’s strategy to counter foreign exchange constraints is centered around working within the regulatory framework, optimizing available resources, leveraging our long-term strategic partnerships, driving operational efficiency and maximizing our extensive distribution network. Additionally, our strategic foresight enables us to make data-driven decisions, ensuring we continue to deliver value to our customers and stakeholders, even in challenging economic conditions. Our aim is to continue to explore re-investing part of our long term earnings in key strategic sectors of the economy.

Capital: How do you perceive the government’s role in addressing foreign exchange challenges for businesses like MOENCO?

Francis: MOENCO fully acknowledges the government’s pivotal role in shaping the economic framework and implementing policies to address foreign exchange shortages. As a key player in Ethiopia’s automotive industry, we are committed to complying with regulatory and economic policies, working in alignment with the government’s efforts to stabilize the economy. Our focus remains on continuing to contribute positively to the socio-economic development of Ethiopia and in providing mobility solutions, ensuring that we operate responsibly within the regulatory guidelines, as we do in every market where Inchcape operates.

Capital: What long-term solutions do you believe could stabilize foreign exchange availability for the automotive sector in Ethiopia?

Francis: As a trusted, long-term player in the Ethiopian market, MOENCO believes in fostering sustainable, long-term solutions that align with Ethiopia’s economic policies. We recognize the efforts made by the government in addressing macroeconomic challenges, including foreign exchange shortages, and we continue to operate within this framework. Our focus is on maintaining strong relationships with our partners, leveraging our expertise to navigate the complexities of the market. This enables us to continue to bring mobility solutions to communities, which enables social inclusion and economic development. As we look to the future, we will continue to align our strategies with the policies set forth by the government, reinforcing our dedication to contributing positively to the growth of Ethiopia.

Capital: Can you provide an overview of the new electric-powered car policy and how it aligns with MOENCO’s business strategy?

Francis: MOENCO fully supports the Ethiopian government’s transformational initiative to move towards electric-powered vehicles (EVs), and in our view, this is a progressive step towards sustainable energy efficient transportation. Our business strategy is aligned with this transition, as we continue to expand our portfolio to include New Energy Vehicles (NEVs), reflecting our commitment to innovation and responsible business practices. We are leveraging Inchcape’s global scale and extensive experiences in multiple markets where we have pioneered the introduction of EVs and low carbon vehicles. Few months ago, MOENCO launched Toyota range of hybrid vehicles alongside the opening of our ultra model Hybrid and Electric Vehicles Service Center. Two weeks ago, we also formally announced our strategic partnership with BYD (‘Build Your Dreams’) as the official distributor in Ethiopia. These bold moves mark significant steps by MOENCO to play pivotal and leading roles towards energy efficient, technological advanced and greener transportation solutions in Ethiopia.

Capital: How has the market responded to the introduction of electric-powered vehicles, and what feedback have you received from consumers?

Francis: The Ethiopian market has shown an enthusiastic response to the introduction of electric and hybrid vehicles. Consumers have demonstrated a growing interest in sustainable mobility solutions, driven by increased environmental awareness and the desire for cost-efficient alternative mobility solutions. Feedback from our customers has been overwhelmingly positive, highlighting the high demand for innovative and more eco-friendly vehicles. We anticipate this trend will continue to grow, and we are well-positioned to meet the evolving needs of the market by expanding our New Energy Vehicle (NEV) offerings.

Capital: In what ways do you believe the shift to electric cars will impact Ethiopia’s environmental goals?

Francis: The transition to electric cars is a significant stride towards achieving Ethiopia’s environmental and economic objectives, particularly in reducing carbon emissions, enhancing air quality and in cost efficiency. MOENCO, as part of Inchcape’s Accelerate+ strategy, is committed to being at the forefront of this transition by leveraging our scale, highly skilled human capital, technology and data-driven insights. By expanding our NEV portfolio, we are contributing to the global ambition of attaining net zero emissions. Our focus on sustainable mobility aligns with the Ethiopian government’s environmental goals and demonstrates our enhanced commitment to sustainability, as we aim to lead the automotive distribution sector in environmentally and socially responsible practices.

Capital: What challenges do you foresee in implementing this new policy within the Ethiopian automotive market?

Francis: The mobility transition happens at different paces and is inherently local, influenced by factors such as geography, economy, energy mix, local policy, culture and social preference. While the shift to green energy may present initial challenges, such as EV related infrastructure development and consumer adaptation, MOENCO views this evolution as a strategic opportunity for growth of the automotive sector. Our focus on reducing carbon emissions and advancing towards net zero aligns with both global and local priorities. We are proud to be a part of this laudable transition, positioning Ethiopia at the forefront of the shift to New Energy Vehicles (NEVs) in Africa. This evolution aligns with our mission to enable a sustainable mobility transition that is inclusive and long-lasting, supporting the country’s long term environmental and economic goals.

Capital: What is your affiliation with Red Sea Automotive?

Francis: Inchcape PLC, our parent company, is the World’s Leading Automotive Independent distributor, listed on the London Stock Exchange and operating in over 40 countries representing more than 50 global automotive brands. In Africa, we have a strong presence across Ethiopia, Kenya, Djibouti, Tanzania, and Uganda, where we own and operate subsidiaries of Inchcape PLC, including Red Sea Automotive operating from Djibouti Free Zone. This extensive footprint reflects Inchcape’s commitment to delivering comprehensive mobility solutions across diverse markets, reinforcing our leadership position in the region.

Capital: What is the contribution of MOENCO to the Ethiopian economy?

Francis: MOENCO has made significant contributions to the Ethiopian economy, playing a vital role in the socio-economic development of the country for over 60 years. We have over the years facilitated knowledge and technology transfer, created good quality employment opportunities, and developed skills, benefiting hundreds of individuals and partners. Our significant investments in community development projects and our recognition as a six-time consecutive Platinum Award-winning taxpayer underscore our commitment to national socio-economic growth. Through our comprehensive mobility solutions across B2B and B2C segments, we continue to support various sectors of the economy, reinforcing our role as a key driver of economic progress. This aligns with our purpose, of “Bringing Mobility to the world’s Communities for Today, for Tomorrow and for the better”.

Capital: Do you have plans to open an assembly plant here in Ethiopia?

Francis: We are continually assessing opportunities alongside our global automotive manufacturing partners for end-to-end investment in Ethiopia’s automotive sector, including the potential to establish local assembly plant. MOENCO’s strategic focus is on creating a robust and sustainable mobility ecosystem. This forward-looking approach reflects our commitment to building a stronger, more resilient automotive market in Ethiopia.