CHALLENGE AND OPPORTUNITY OF IMPORT SUBSTITUTION IN LOCAL VEHICLE ASSEMBLING: THE CASE OF SELECTED VECHILE MANUFACTURERS

Abstract

The study is designed to investigate challenge and opportunity of import substitution in local vehicle assembling: the case of selected vehicle manufacturers in Ethiopia. To this end; the study has the objective to investigate the practice of local vehicle, challenges regarding the sector and what factors significantly affect the import substitution. Primary data was collected through questionnaires. The questionnaire was distributed to 48 sample employees from four local vehicle manufacturing companies who are directly related to the import substitution and 200 sample customers based on Malhotra (2007) sampling determination. Mainly this research used descriptive analysis in order to assess the practice of local vehicle manufacturing sector. Based on the data obtained from the respondents and results of the tests, the study identified that policies, government practical support, financial support from financial institution, customer attitude towards local vehicle and well-trained expert in the sector were the challenges that import substitution faced. On contrary, the research showed that the market demand in the sector is the opportunity that the sector has.