The main purpose of the research was to analyze the automotive industry and its trend in Ethiopia. In recent years, the contribution of the automotive sector is increasing and it is playing important role in the national economy. Although the automotive sector is playing significant role, it is still at low level and many factors contributed for that, including:• Government regulations; • Road conditions; • Purchasing power of the people; • Lack of skilled manpower and capacity; • Shortage of capital. To address those issues, the researcher used both primary and secondary data. The collected data were analyzed and the result of the analysis was summarized in to positive and negative aspects. It was revealed that the positive aspects; contribution to the national economy, future growth prospect, employment opportunity and profitability of the operation outweigh the negative aspects. As the research had scope and limitations, it was recommended to the governing authorities to undertake further studies to make an informed decision on how to support the growth and development of the automotive industry in Ethiopia.