The automotive sector is arguably the most important vehicle for realizing economic development, creating employment and reducing poverty in Ethiopia. The contribution to automobile component production of economic growth can only be realized when and if the new technology is widely diffused and used; thus, technology absorption is a crucial and dynamic factor in technological progress. However, the absorption and diffusion of these technologies are constrained by various factors. To this end, the aim of this study was to examine the status of technology absorption in the Ethiopian automotive industries. The study is guided by a conceptual framework derived from the review of the literature on organizational and technological factors that influence the production of vehicle components. To achieve the above-mentioned purpose, both qualitative and quantitative approaches were employed in the study. A survey through the questionnaire was used to collect data from the main industry‟s owners, managers, and supervisors, Overall 65 survey questionnaires were distributed but only 48 of these were answered, the obtained data were analyzed by SPSS, version: 23. Statistical analysis techniques, including, descriptive and inferential analysis. Findings of data analysis indicated that: the levels of collaborating with the manufacturers while transferring in assembly production technology are in infant stage. In this respect, automotive industries should not only increase their fully assembly capacity; besides, the assembler companies build partnership through strategic alliance and technology spillover with component suppliers, it is critical to the achievement of an objective and build infrastructures of R&D capacity, through which technology absorption occurs not only in embodied machinery and equipment, but also the elimination of technological dependency on technology absorption. Finally, recommendations for improving the current practices and made for future researches are suggested based on the findings.