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The first automobile car assembly plant in Ethiopia, Holland Car Plc, announced to its employees last Tuesday via teleconference that the company had gone bankrupt. The company’s founder and general manager, Tadesse Tessema (Eng.), conducted the teleconference direct from Holland with his employees in Ethiopia.

The company was founded in 2005 with an eleven million birr initial capital after Tadesse decided to establish it in a joint venture with a Dutch company Trento BV, Engineering.

The company could not settle the 20 million birr loan which it borrowed from Zemen Bank, The Reporter learnt.
“In 2010 we were asked to come up with a solution for the shortage of public transportation in the country. Following that a task force comprising [the then] Addis Ababa Branch Office of the Federal Road Transport Authority, Anbessa City Bus Enterprise, Holland Car and a few experts from the Netherlands conducted a study and managed to come up with a possible solution. On July 2010, we presented the study at a meeting held at Sheraton Addis and the project idea wast accepted by the stakeholders. Afterwards, Holland Car started to build a factory that assembles buses and we displayed the first bus that was assembled at a cost of over 8.5 million birr. However, after we manufactured the bus, we were told that the stakeholders from the transport sector are not interested to work with us on public transportation and that’s how we incurred our biggest loss,” Tadesse explained to his employees.

He went on to say that foreign currency crunch, devaluation of the birr against the dollar, the rising inflation and other steep expenses including rent forced the company in to bankruptcy.   

According to sources, the company had deals with 600 customers to deliver assembled cars of different models. However, as the company could not carry on importing items and assemble orders from customers it had no option but to refund the money that was paid by some 480 customers. Though the company has managed to import parts for 120 cars, it has been slapped with a customs duty that is still outstanding  and is obliged to pay 85,000 birr apiece to the prospective owners due to the devaluation of the birr.

The company used to assemble cars under different brands namely Docc, Abay, Shebelle, Awash Executive, Abay Executive, Imay, Tekeze and Ahadu (trailer bus).
The company’s first assembly plant was built on a 20,000-sq.m plot near Modjo, 70 kms south east of Addis Ababa. The second plant was opened in late 2008 under the name Cassiopeia Assembly Factory in Tatek, a former military barrack located on the outskirts of the capital.

Holland Car was awarded the "JAC Motors Best Overseas Plant - 2009" award from its supply partner, JAC Motors. It was also awarded the prestigious SMME 2009 award in the most innovative category and was a recipient of the 2009 Africa SMME of the year Award which was held in Cape Town, South Africa in October, 2009.

Before establishing Holland Car Tadesse founded a company named Ethio-Holland which used to import used Lada cars from the Netherlands. Later he decided to assemble cars locally in Ethiopia and launched Holland Car.

In 2007, Holland Car assembled the Lifan 520 under the name Abayuntil it parted ways with the Chinese Lifan Group in 2009. In the same year the company concluded a new deal with another Chinese company, JAC Motors, to supply it with engines.
Currently, Holland Car has around 100 employees down from a high of 250.