Ethiopia Two-Wheeler Market By Vehicle Type (Scooter/Moped, Motorcycles), By Propulsion Type (ICE, Electric), By Region, Competition, Forecast & Opportunities, 2020-2030F

Market Overview:

The Ethiopia Two-Wheeler Market was valued at USD 657.0 Million in in 2024 and is expected to reach USD 806.5 Million by 2030 with a CAGR of 3.48% during the forecast period. The two-wheeler market in Ethiopia is experiencing significant growth due to a combination of factors that are reshaping the transportation landscape. Urbanization is one of the key drivers, with more people migrating to cities where public transport systems often fail to meet the increasing demand. Motorcycles and scooters offer a flexible, cost-effective solution for commuting in crowded urban areas, providing easy navigation through traffic and reducing travel time. As disposable incomes rise, the affordability of two-wheelers has increased, making them a popular choice for both personal use and commercial purposes. In addition, the Ethiopian government's initiatives to promote cleaner and more energy-efficient vehicles have spurred interest in electric two-wheelers, further propelling market growth.

Several emerging trends are shaping the two-wheeler market in Ethiopia. The growing demand for electric motorcycles is a reflection of the   shift toward sustainable transportation options. With a significant portion of Ethiopia's population seeking affordable and environmentally friendly alternatives to traditional vehicles, electric two-wheelers are gaining popularity. Furthermore, the rise of online delivery services and e-commerce is boosting demand for motorcycles and scooters, as businesses rely on them for last-mile delivery solutions. The increased use of digital platforms for ordering and payments is also encouraging consumers to consider two-wheelers for personal and business transportation. 

Despite the positive outlook, the market faces certain challenges. Infrastructure development remains inadequate, particularly in rural areas, making it difficult for two-wheeler owners to access reliable roads and service centers. The lack of proper road safety regulations and enforcement further complicates the situation, with an increasing number of accidents involving two-wheelers. Additionally, the market is still heavily reliant on imported two-wheelers, which increases the cost due to import duties and logistics expenses. As a result, local manufacturing and assembly could play a crucial role in addressing these issues but requires investment in infrastructure and technology. These factors present hurdles to the market’s long-term growth, but with the right interventions, they can be mitigated.

Market Drivers

Rising Urbanization

Urbanization in Ethiopia is accelerating, leading to a surge in demand for personal mobility solutions. As more people move to cities, traffic congestion becomes a serious issue. Two-wheelers provide an efficient alternative to traditional cars, offering flexibility and ease of movement in densely populated areas. The demand for motorcycles and scooters is increasing as they can navigate through heavy traffic more easily, cutting down commute times significantly. Urban areas are also more likely to have improved infrastructure for two-wheelers, encouraging their use as a preferred mode of transport.

Increase in Disposable Income

As Ethiopia’s economy grows, the middle class is expanding, resulting in higher disposable incomes. This economic growth makes two-wheelers more affordable to a broader segment of the population. With increased purchasing power, consumers can opt for motorcycles or scooters not only for commuting but also for business purposes. This rise in disposable income is driving the demand for both new and second-hand two-wheelers, offering an accessible solution for many who might otherwise rely on public transport.

Government Policies Supporting Electric Vehicles

The Ethiopian government has been focused on sustainable transportation, creating favorable policies for electric vehicles (EVs). Incentives such as tax reductions or exemptions for electric two-wheelers make them an attractive option for consumers. As environmental concerns grow, there is a shift towards electric mobility, with two-wheeler manufacturers introducing more electric models in the market. Government initiatives that support the production and adoption of EVs help reduce the carbon footprint, contributing to cleaner air in urban areas.

Rising Demand for Delivery Services

The booming e-commerce industry has given rise to increased demand for delivery services. Two-wheelers are an ideal solution for last-mile delivery due to their ability to navigate through traffic quickly and cost-effectively. Small businesses and larger logistics companies are increasingly relying on motorcycles and scooters for their fleets, creating a robust market for these vehicles. The rise of food delivery services and other similar businesses is further driving the growth of two-wheeler sales.

Improved Financing Options

With the growth of financial institutions in Ethiopia, purchasing a two-wheeler has become more accessible through loans and flexible financing options. This change allows more people to afford motorcycles and scooters, leading to increased sales. Financial products tailored to two-wheeler buyers are making the process easier and more attractive, with lower interest rates and longer repayment periods. As a result, more individuals are able to invest in two-wheelers, whether for personal use or business ventures For instance, In September 2024, the National Bank of Ethiopia (NBE) launched a digital banking solution aimed at easing the process for Ethiopians living abroad to open bank accounts in both local and foreign currencies, aligning with the country's ongoing foreign exchange reforms.

Key Market Challenges

Limited Road Infrastructure

Despite growth in urban areas, many regions in Ethiopia still suffer from inadequate road infrastructure. Poorly maintained roads make it difficult for two-wheelers to travel safely and comfortably. In rural and semi-urban areas, potholes, unpaved roads, and lack of proper signage can significantly hinder two-wheeler use, causing safety concerns and increased repair costs. Without significant investment in infrastructure, the growth potential of the two-wheeler market is constrained.

Lack of Proper Road Safety Regulations

The absence of stringent road safety regulations and enforcement poses a significant challenge to the two-wheeler market. With the increasing number of motorcycles on the roads, traffic accidents involving two-wheelers have risen. The lack of safety measures such as helmet use, lane discipline, and proper training for riders increases the risk of accidents, which negatively impacts consumer confidence in adopting two-wheelers. The need for better traffic laws and enforcement remains an ongoing challenge.

High Import Taxes and Logistics Costs

Ethiopia’s reliance on imported two-wheelers increases the cost of these vehicles due to high import taxes and logistics expenses. These added costs make motorcycles and scooters more expensive for consumers, limiting affordability for a large portion of the population. Local assembly or manufacturing of two-wheelers could help lower prices, but the lack of a robust local industry and infrastructure has made it difficult to reduce these costs.

Limited Availability of Spare Parts and Service Centers

As the market for two-wheelers grows, the availability of spare parts and service centers remains a significant challenge. In many regions, there is a shortage of qualified technicians and an inadequate network of service centers, which can delay repairs and increase maintenance costs. This lack of support infrastructure can deter potential buyers who may be concerned about the availability of service and parts in case of breakdowns, ultimately limiting the overall market potential.

Traffic Congestion and Safety Concerns

While two-wheelers are beneficial in navigating through traffic, urban congestion remains a serious challenge. In cities, the increasing number of motorcycles often leads to overcrowding on roads, making it difficult for riders to maneuver safely. In addition, the lack of proper lanes for two-wheelers and disregard for traffic rules can result in accidents. Safety concerns, especially among new riders, further hinder the widespread adoption of two-wheelers.

Key Market Trends

Shift Toward Electric Two-Wheelers

With growing awareness of environmental issues and the need for cleaner transportation solutions, there is a noticeable shift towards electric two-wheelers in Ethiopia. Consumers are increasingly considering electric motorcycles and scooters as alternatives to traditional fuel-powered vehicles. Electric two-wheelers offer several benefits, including lower operating costs, less noise pollution, and a reduced carbon footprint. As battery technology improves and charging infrastructure expands, the adoption of electric two-wheelers is expected to accelerate.

Growth of Ride-Sharing and On-Demand Services

The popularity of ride-sharing and on-demand delivery services is transforming the two-wheeler market in Ethiopia. Platforms like Uber and local delivery services are adopting motorcycles for their fleets, boosting the demand for two-wheelers. These businesses offer customers quick, affordable transportation while providing employment opportunities for riders. The convenience of on-demand services and the rising preference for shared mobility is fueling the demand for motorcycles and scooters in both urban and suburban areas.

Technological Advancements in Two-Wheelers

Technological advancements in two-wheelers are gaining traction in the Ethiopian market. Features such as GPS navigation, digital dashboards, improved fuel efficiency, and better safety mechanisms are making motorcycles and scooters more attractive to consumers. Manufacturers are integrating advanced technology to improve the overall riding experience, making it easier for customers to use and maintain their vehicles. These innovations are likely to continue to shape the market as demand for more advanced and feature-rich two-wheelers rises.

Integration of Smart Mobility Solutions

The growing interest in smart mobility solutions is influencing the two-wheeler market. From smartphones integrating with bikes to offer navigation, tracking, and vehicle diagnostics, to the potential of two-wheeler-sharing platforms, smart technologies are becoming an essential part of the consumer experience. This trend is attracting younger, tech-savvy riders who value convenience, connectivity, and efficiency in their transportation options. As the digital ecosystem in Ethiopia continues to grow, smart mobility will play a larger role in shaping the two-wheeler market.

Increase in Motorcycle Exports

With the growing local demand for two-wheelers, Ethiopia is beginning to explore motorcycle exports as a potential revenue stream. As local manufacturers and assemblers increase production capacity, there is an opportunity to enter regional markets where demand for affordable motorcycles is high. The trend toward exportation offers significant growth potential for the local two-wheeler industry, boosting the economy and creating jobs. Expanding export markets also provides an avenue for Ethiopian manufacturers to improve production quality and standards.

Segmental Insights

Vehicle Type Insights

The two-wheeler market in Ethiopia is segmented primarily into motorcycles and scooters/mopeds, with each category catering to different consumer needs and preferences. Motorcycles are widely used for both personal and commercial purposes. These vehicles are known for their power, speed, and versatility, making them ideal for longer commutes and navigating through traffic. Motorcycles are often the preferred choice for businesses offering delivery services, as they can carry larger loads and travel longer distances compared to scooters or mopeds. They are also favoured for recreational purposes, with many individuals using them for leisure rides. Motorcycles typically come in various engine sizes, allowing consumers to choose according to their needs, whether for daily commuting or commercial use.

Scooters and mopeds, on the other hand, are more commonly used for short-distance travel. These vehicles are typically smaller, lighter, and easier to manoeuvre in congested urban areas. Their lower engine capacity makes them more fuel-efficient, making them attractive to consumers who need an affordable and eco-friendly option for daily commuting. The ease of use, combined with relatively lower maintenance costs, appeals to young professionals, students, and individuals who primarily need a vehicle for urban mobility. Moped and scooter designs also tend to be more compact, which makes them a practical choice for navigating narrow streets and busy city centres.

Both vehicle types benefit from the increasing demand for personal transportation due to factors such as urbanization, rising fuel prices, and a growing preference for cost-effective solutions. The ongoing trend toward environmental consciousness is also influencing the market, with more consumers considering electric versions of motorcycles and scooters. While motorcycles may still be favoured in rural areas for their durability and ability to handle rougher terrains, scooters and mopeds are becoming increasingly popular in urban settings where ease of parking and manoeuvrability are highly valued. The diversity in these vehicle types allows the Ethiopian two-wheeler market to cater to a wide range of consumers, each with specific requirements based on their lifestyle and transportation needs.

Regional Insights

In 2024, the dominant region for the two-wheeler market in Ethiopia was expected to be the Addis Ababa, Harari & Oromia Regions. This region is the most urbanized in the country and experiences the highest demand for personal and commercial transportation. The rapid growth of the city has led to significant traffic congestion, making two-wheelers an ideal solution for navigating through crowded streets. Motorcycles and scooters provide flexibility and speed, allowing commuters to bypass traffic jams, reducing travel time in a city where other forms of transportation may be less efficient.

Addis Ababa is also home to a growing middle class with rising disposable incomes, making two-wheelers more affordable and accessible for a larger segment of the population. Many individuals are opting for motorcycles and scooters as an alternative to expensive cars, while businesses, particularly in the delivery sector, are increasingly relying on these vehicles for last-mile logistics. The rise in e-commerce and food delivery services in the city has created a thriving market for motorcycles and scooters, further boosting demand in the region.

The infrastructure in Addis Ababa is more developed compared to other parts of Ethiopia, with improved roads and a greater number of service centers, making it a favorable environment for two-wheeler ownership. Though challenges such as traffic congestion and parking remain, the availability of essential services and the convenience of two-wheelers for daily commutes make this region the dominant market for two-wheelers. Furthermore, government initiatives to promote electric vehicles are being implemented more actively in urban areas, contributing to the increased adoption of electric motorcycles and scooters in Addis Ababa. The presence of local dealerships, financing options, and a growing network of charging stations for electric vehicles also enhances the attractiveness of the capital city as the central hub for the two-wheeler market.

Recent Developments

• In May 2024, Dodai, an Ethiopian e-mobility startup, has launched electric motorbikes in Addis Ababa, marking a significant move towards sustainable transport in Africa. The company has raised USD 4 million to scale production and expand its operations. Dodai’s electric bikes, which can travel up to 150 km per charge, offer a 95% cost savings compared to traditional fuel-powered motorcycles, benefiting from Ethiopia’s cheap electricity.
• In November 2024, Ethiopia will host its inaugural green mobility exhibition as part of the country's efforts to cut carbon emissions and promote sustainable transport solutions.  Scheduled from November 22 to Saturday at the Huajian International Light Industry Special Economic Zone in Addis Ababa, the capital, the Ethio-Green Mobility 2024 exhibition will highlight the latest advancements in green mobility, featuring state-of-the-art electric vehicles (EVs) and renewable energy technologies.
• In September 2023, KTM India has introduced the all-new single-cylinder Duke 390 and Duke 250 motorcycles, with prices set at USD 3,788.34 (INR 310,520) and USD 2,915.80 (INR 239,000), respectively.
• In July 2023, Harley-Davidson spinoff LiveWire unveiled its second motorcycle that can achieve speeds of 103 MPH.

Key Market Players

• Bajaj Auto Ltd.,
• TVS Motor Company Limited
• Yamaha Motor Co., Ltd
• Hero MotoCorp Ltd
• Honda Motor Co, Ltd
• Kwang Yang Motor Co., Ltd
• Suzuki Motor Corporation
• Sanyang Motor Co., Ltd
• Lifan Motors
• Luoyang Northern EK Chor Motorcycle Co., Ltd.

Report Scope:

In this report, the Ethiopia Two-Wheeler Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

       ·          Ethiopia Two-Wheeler Market, By Vehicle Type:

o   Scooter/Moped

o   Motorcycles

       ·         Ethiopia Two-Wheeler Market, By Propulsion Type:

o   ICE

o   Electric

       ·          Ethiopia Two-Wheeler Market, By Region:

o   Addis Ababa, Harari & Oromia Regions

o   Amhara, Tigray & Benishangul-Gumuz Regions

o   Southern Nations & Gambela Regions

o   Somali, Afar & Dire Dawa Regions

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Ethiopia Two-Wheeler Market.

Available Customizations:

Ethiopia Two-Wheeler Market report with the given market data, TechSci Research offers customizations according to the company’s specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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