By AfroMekina | Ethiopia's Car Marketplace

East Africa's two largest economies share borders, trade routes, and a love for Toyota. But when it comes to the car market, Kenya and Ethiopia are surprisingly different — in size, policy, pricing, and direction. Whether you are a buyer, a dealer, or simply curious, this comparison breaks down everything you need to know.

Market Size: Kenya Is Bigger, But Ethiopia Is Growing

The gap between the two markets is significant.

Kenya sold approximately 11,352 new vehicles in 2024, and that number jumped to over 12,427 units in just the first eleven months of 2025 — a strong recovery driven by falling interest rates and renewed fleet demand.

Ethiopia sold around 2,800 new cars in 2024. That is less than a quarter of Kenya's volume despite Ethiopia having a population of over 120 million — more than double Kenya's 55 million.

What explains this gap? Two words: taxes and income.

Ethiopia has one of the most expensive car import tax regimes in Africa. A buyer in Ethiopia can pay more than 500% of a vehicle's import price in combined taxes — customs duty, VAT of 15%, excise tax of up to 100%, surtax, withholding tax, and income tax. This makes cars unaffordable for most citizens.

Kenya's system is far more accessible. Import duty sits at 25% of customs value, excise duty ranges from 20–25% depending on engine capacity, and VAT is 16%. High by global standards, but far below Ethiopia's punishing rates.

The result? A Kenyan earning a middle-class income can realistically save up and buy a used car. For most Ethiopians, car ownership remains out of reach.

Import Rules: Kenya Looks to Japan, Ethiopia Pivots to EVs

This is where the two markets diverge most dramatically.

Kenya has a well-established used car import pipeline, primarily from Japan. The rules are clear: vehicles must be right-hand drive and no older than 8 years from the date of manufacture. This age cap keeps Kenya's roads relatively modern and has created a thriving industry of Japanese import dealers.

Ethiopia made a historic policy shift in January 2024 — the government banned the import of non-electric passenger vehicles entirely. The goal is to reduce Ethiopia's massive fuel import bill (over $4 billion per year) and leverage the country's abundant hydroelectric power.

The results have been dramatic. More than 60% of newly registered personal cars in Ethiopia in 2024 were electric vehicles — one of the highest EV adoption rates in Africa, if not the world. The government sweetens the deal with zero customs duty for locally assembled EVs and a 5% rate for semi-assembled ones, plus full VAT and excise tax exemptions.

Kenya is moving toward EVs too, but more gradually. The country has introduced reduced excise duty rates for electric vehicles and launched Africa's first hybrid car battery lab. But there is no ICE import ban, and the traditional used car import market remains dominant.

Best-Selling Cars: Similar Taste, Different Leaders

Both markets love Toyota, but the rankings tell different stories.

In Ethiopia (2024):

Toyota Land Cruiser 70 — 26.1% market share
Chery Arrizo 5 — 12.9% market share
BYD Seagull — rising rapidly
Chinese brands dominating the rest of the top 10

In Kenya (2024/2025):

Isuzu — dominant with 47–48% market share (mainly commercial vehicles)
Toyota — 32.5% market share
Mitsubishi, Volkswagen, and others trailing far behind

Kenya's market is heavily commercial-vehicle driven. Isuzu trucks, buses, and pickups dominate because Kenya has a larger and more active logistics and construction sector. Ethiopia's top seller, the Land Cruiser 70, reflects a country where government, NGOs, and businesses need vehicles that can handle rough terrain and remote areas.

The rise of Chinese brands — BYD, Chery, Dongfeng — is happening in both markets, but Ethiopia's EV policy has accelerated Chinese adoption faster since Chinese brands dominate the global EV space at affordable price points.

Used Car Market: Kenya Leads, Ethiopia Has Huge Potential

Kenya's used car market is valued at approximately $1.28 billion in 2025 and is one of the most active in East Africa. The market is well-organized, with established dealer networks, online platforms, and Japan import pipelines. Websites like Jiji, PeachCars, and others have made buying and selling used cars increasingly transparent.

Ethiopia's used car market is valued at approximately $482 million in 2025 — smaller, but still significant given the country's income levels. The market is dominated by informal dealers, with organized dealerships slowly gaining ground through digital platforms. Addis Ababa accounts for nearly 60% of all registered vehicles in the country.

One challenge unique to Ethiopia is odometer fraud and document manipulation. Because import taxes are so high, a black market of smuggled vehicles has emerged — cars brought in through Kenya, Djibouti, Somalia, and Sudan to evade customs. Some of these vehicles end up with falsified documents on Addis Ababa's streets.

Kenya faces its own version of this — odometer rollback in Japanese imports is a known issue — but the overall system is more formalized and regulated.

Online Car Marketplaces: Kenya Ahead, Ethiopia Catching Up

Kenya has a more mature online car buying ecosystem. Platforms like Jiji Kenya, PeachCars, and Cheki have been operating for years with large listing volumes, price transparency, and user reviews.

Ethiopia's online car market is younger but growing fast. Rising smartphone penetration and internet access in Addis Ababa — with subscriptions climbing above 27 million in 2025 — are driving buyers to digital platforms. Sites like Megebeya, Qefira, and AfroMekina are compressing discovery costs and shifting car buying behavior toward online research.

The opportunity in Ethiopia's online market is enormous precisely because it is still early. The buyer who researches online before visiting a dealer is becoming the norm rather than the exception.


		what Each Market Can Learn from the Other

Ethiopia can learn from Kenya's more organized used car verification systems, transparent pricing platforms, and accessible financing options. Kenya's 8-year rule also keeps older, less efficient vehicles out of the market — a model Ethiopia could consider for its EV transition.

Kenya can learn from Ethiopia's bold EV policy. Ethiopia's ICE ban has forced rapid adoption of electric vehicles in a way that voluntary incentives alone never could. Kenya's emissions targets may eventually require similar decisive action.

What This Means for Car Buyers

If you are buying a car in Kenya, you have more options, more competition among dealers, and a more predictable used import pipeline. The market is mature and relatively transparent.

If you are buying a car in Ethiopia, you are navigating a market in transition. The old rules around used ICE imports no longer apply. EVs are becoming the new normal, prices are shifting, and digital platforms are making it easier to compare and verify before you buy. It is a more complex market, but one where informed buyers can still find excellent value — especially in the used car segment where ICE vehicles can still be bought and sold freely.

Final Thoughts

Kenya and Ethiopia are both East African powerhouses, but their car markets reflect very different economic realities and government priorities. Kenya's is larger, more open, and more organized. Ethiopia's is smaller but undergoing the most dramatic policy transformation on the continent.

One thing both markets share: the dominance of Toyota, the importance of durability over luxury, and a rapidly growing population of car buyers who are doing their research online before stepping into a showroom.

Looking to buy or sell a car in Ethiopia? Browse verified listings on AfroMekina — updated prices, trusted sellers, and the best deals in Addis Ababa and beyond.