Cairo- The Egyptian Motor Market has witnessed a remarkable transformation since the launch of the national strategy for localizing the auto industry, as sales of vehicles collected locally increased dramatically during the past year.
The state launched its strategy in the middle of 2022, in cooperation with local and foreign partners and the Federation of Industries, with the aim of meeting the increasing demand for cars and reducing dependence on imports, as the annual demand volume is expected to reach 8 billion dollars during the next decade.
This strategy included supportive measures for the auto sector, including:
- Introducing a new customs tariff to support the local industry.
- Establishing the Supreme Car Industry Council to secure the necessary financing for environmentally friendly cars.
- Issuing incentive law aimed at enhancing the resettlement of industry and developing local supply chains.
Amr Suleiman, head of the “Al -Amal” company – the local agent of the Chinese “BYD” – attributed the improvement of local production to the banks funding the import of components by opening the credit letters, which contributed to reducing the volume of total import and increasing the competitiveness of locally combined cars.
Suleiman explained – in press statements – that this trend has strengthened its opportunities to expand its market share, and offered a number of models collected locally, especially with the decline in the supply of imported cars.
A car jump locally in 2024
Locally collected car sales witnessed an increase of 31.7% to record about 43.1 thousand cars during 2024, compared to about 32.7 thousand cars in 2023, according to the report of the Automobile Market Information Council “Amik”.
This number is close to the expectations of the company “Fitch Solichins” (the research arm of the Fitch Credit Classification Group), which expected Egypt’s production of cars to 37 thousand units, ranked second among North African countries after Morocco in the production of vehicles.
On the monthly level, the sales of locally combined cars in Egypt recorded a remarkable increase by 65.6% during January 2025, when 6149 units were sold in the same period last year, showing a strong start for the new year.
A history of previous attempts
Egypt witnessed contracts from attempts to enter the auto market, through Al -Nasr Motors, which achieved wide fame locally and Africa. However, this company faced challenges that led to its production in 2009, and it has been suspended for 15 years before productive activities returned at the end of 2024.
“The password of this transformation is the state’s efforts in localizing the automobile industry as well as the nutrient industries, and these steps aim to reduce dependence on import and push the wheel of local production.”.
He added – in statements to Al -Jazeera Net – that the state should take the initiative to increase local production on the one hand and increase the percentage of the local component, which reaches approximately 50% in the production of some cars, and not only relying on import because it costs the state treasury billions of dollars annually.
Foreign exchange crisis revives the auto industry
Although the local component remains less than 50%, the increase in local car sales reflects several economic factors, most notably:
- Encouraging the state to localize the auto industry locally.
- Consumers seek more available options in light of the high import costs.
- Exploiting the imposition of restrictions on the import of cars due to the foreign exchange crisis.
Osama Abu al -Majd, the deputy head of the Automobile Division of the Federation of Chambers of Commerce, who is also the head of the Association of Automobile Traders, described the transformation of the auto industry locally as “a state directed due to the foreign exchange crisis that exacerbated during the year 2024, and the result was the inauguration of 3 factories the first two months of the same year.”
In response to the direction of some investors towards import instead of local manufacturing, which is characterized by complex production stages, Abu al -Majd stressed that this approach reflects a short -term vision aimed at achieving immediate gains, noting that the national strategy to empower the industrial sector constitutes a different approach based on the promotion of local industries, as in addition to agriculture the basic pillar to build strong economies.
Abu al -Majd explained – in his interview with Al -Jazeera Net – that leading Egyptian companies succeeded in producing a wide variety of cars in accordance with the international standards of famous international models, pointing to the dominance of locally gathered cars on sales in the Egyptian market, as well as exporting thousands of them to foreign markets.
With regard to the size of production that does not meet the needs of the market, Abu al -Majd explained that this requires overcoming more obstacles by strengthening supply chains and facilitating the import of production components.
And he expected the indicators of improvement to appear in the second half of this year, to reach their peak by 2030, in parallel with the implementation of structural solutions offered.
How did the culture of consumption change locally?
In turn, a member of the Automobile Division of the General Federation of Chambers of Commerce, Muntasir Zaitoun, enumerated the reasons that led to an increase in the production of car collection locally, namely:
- The state is directed to resettle car makers.
- Promote feeding industries.
- Reducing the import bill.
- High cost of imported cars.
- Foreign exchange scarcity during the last period.
In light of the previous factors, Zaitoun indicated – in statements to Al -Jazeera Net – that the citizen’s culture has changed compulsory with the inability of a wide segment of Egyptians to acquire certain types of cars whose prices have jumped dramatically (several times) compared to before 2022, and part of them turned into cheaper types of cars.
Zaitoun touched on the government’s efforts to encourage local industries, including the auto industry, by providing facilities and incentives for local manufacturers such as exemption or reducing fees, taxes and customs.
Regarding fears of declining quality, he emphasized that there is severe control over the achievement of quality standards by parent companies abroad that are not allowed to be overlooked, and that there is a strong device in Egypt to protect the consumer, which ensures that production is free of any manufacturing defects.
The expert in the car market called on the state to reduce fees and motivate local industries, noting that the increase in the demand for cars in the Egyptian market may be a motivation to increase local production and sales and reduce prices because increasing production reduces the cost.
Egypt is witnessing a remarkable movement in the auto industry, as the agreements are followed by hundreds of millions of dollars between local and foreign investors, especially with Chinese auto manufacturers, with the aim of localizing its industry locally.
Egypt allocated one billion pounds in the 2024-2025 budget (the dollar equivalent to about 50.60 pounds) to finance the strategy of localizing the auto industry, with the aim of attracting investments and increasing local production to more than 45% of the local component, according to the Ministry of Finance.
