Where did Egypt reach the auto industry plan?

9 New local and international car businesses are preparing to enter the Egyptian market during the current and next years, and targeted up to 165 thousand cars, which brought the total local cars locally to 260 thousand, exceeding the government’s target by about 160%, which also looks forward to the hindrance of 400 thousand cars annually by 2030, within a broad strategy. In this context, 5 companies operating in the country are planning ‘GB Auto’, ‘Nissan’, ‘GAC’, ‘AL -Mansour’ and ‘Al -qasrawi’ to invest 630 million to launch factories to raise cars locally to reduce the dependence on imports, according to ‘all Sharq’. It seems that these recent moves are not just a passing economic step, but rather a reference to a serious attempt to sign the operating card in the country, in a time when Egypt faces sharp economic pressure associated with supply chains, hard currency deficit and import challenges. While the state is aimed at increasing the production of cars and increasing the generation of the local component, complex challenges associated with attracting foreign investment, the competitiveness of the Egyptian product and building an integrated nutritional operation system. In this context, this analytical report reopened the automotive industry in Egypt, and puts new investments into the balance of reality and ambition, as a goal for success opportunities and possible stumbling sources. 1) Why is Egypt trying to localize his auto industry? Egypt is currently looking at the purpose of resolving the automotive industry as a basic task within a broader economic strategy aimed at reducing the dependence on imports and eliminating the pressure on hard currency. The state spends billions of dollars to import cars annually, which is an increasing burden on its foreign exchange reserves. By strengthening local manufacturing, the government wants to reduce this bill and make greater self -sufficiency. The automotive industry is also an opportunity to achieve added value to the economy and increase the contribution of the industrial sector to the gross domestic product, in addition to providing thousands of direct and indirect jobs, especially with the expansion of the nutritional industries. Egypt counts on the distinctive geographical location and its multiple commercial agreements to convert itself into a regional center for the composition of cars and exporting them to African, Arabic and even European markets, especially in light of foreign businesses – such as Chinese – to overcome the customs restrictions on their exports. At the same time, the Egyptian government is aware of the importance of keeping up with the global shift to electric vehicles, and seeks to utilize an early location in this future market by supporting environmentally friendly cars, through projects such as the revival of the “Al -Nasr Motors” project and the electric vehicle support fund. These efforts come as part of a broader approach to the diversification of the country’s industrial base and to improve the state ‘industrial security’, so that the economy is more able to face global fluctuations and bring about sustainable growth. 2) What does the government so far have to localize the automotive industry? The Egyptian government is making strenuous efforts to localize the automotive industry in the country, including the launch of the national strategy for the automotive industry in June 2022, and the National Automobile Development Program (AIDP) in November 2023, which provides an integrated and comprehensive policy for the car industry and its nutritional operations. It has also established and specialized the car industry unit of the Ministry of Trade and Industry in the establishment of the detailed instructions for accreditation and rehabilitation for car manufacturers and the establishment of examples of requests to join the National Program for the Development of the Motor Industry, and the establishment of the highest council of the car industry. At the end of October 2022, Egyptian President Abdel Fattah EL -Sisi signed the law for the establishment of the Council for the Supreme Car Industry, and they are setting up the general framework for legislative and administrative reform for the automotive industry. Egypt has launched an environmentally friendly car support fund, which aims to develop the resources needed to finance the environmentally friendly automotive industry, especially in the field of establishing technological centers and research needed to develop this industry, and to work to encourage and develop innovation to increase the competitiveness of the environmentally friendly car industry. The presidential initiative to replace the vehicles, which was launched in 2021, targeted the promotion of environmentally friendly vehicles in about 15 governors in the first phase of the initiative in preparation for the basis of the beneficiaries of the initiative in the rest of the governors, and the initiative worked to increase the car industry by increasing the car industry. The Egyptian government has paid particular attention to the industries that the automotive and infrastructure associated with the industry, where approximately 3000 shipping stations are established and operated, and the establishment of the necessary natural gil stations has expanded to provide cars. 3) Does Egypt have enough ingredients to convert the dream of caring cars in reality? Egypt has a set of geographical and economic ingredients that make it a promising and tempting location for the manufacture and composition of international cars, especially in light of the changes that occur in the global economy and supply chains. Egypt is located on a crossroads between Africa, Asia and Europe, which makes it an ideal transport gate for land, sea and air trade. It is also close to Africa markets. Egypt is trying to take advantage of the economic agreements that contribute to the promotion of trade exchange with different countries in the world, including the vehicle sector, and includes the partnership agreement signed with the European Union in 2001, and entered into 2004. The joint market agreement for the East and South African (Comea) was signed in 1998 and the number of member states of the judge reached the governments, and it signed to the Agadir agreement. Double the local production of cars in Egypt to reach 260 thousand units annually by 2026, compared to 95,000 cars currently. It also looks forward to exceeding the hindrance of 400,000 cars annually by 2030, with 25% of this production allocated for exports, which can produce about $ 4 billion to hard currencies annually. Some of the most prominent goals of the national strategy to encourage the car industry in Egypt have increased to 60% in the coming years, which is the cornerstone of any actual settlement plan. Reports indicate that some existing production lines have already achieved a high rate of local manufacturing, which increases the possibility of building on this industrial base. A central unit was also established to facilitate the procedures for the work of car businesses, in addition to the highest advice of the automotive industry, in an effort to provide a stable and organizational legislative and organizational environment for investment. In addition, the Egyptian market suffers from a clear gap between local demand and the existing supply; Motors annual sales usually range from 200 to 250 thousand cars, while local production is not more than 95 thousand units, which opens the way for manufacturers to fill these voids by expanding productive energies locally, especially after the restrictions imposed on the loud currency crisis over the past few years. But despite the current momentum, the success of the project continues to depend on the state’s ability to develop its available technologies, still provide effective incentives, ensure the stability of industrial policies, develop the nutritional operation system, as well as to increase the efficiency of technical workers and facilitate export procedures. Regional competition in this field is fierce, and there is no room for success, except with a serious and sustainable implementation of the declared vision. 4) What are the most prominent international car businesses interested in investing in Egypt? Egypt has recently signed contracts through which cars are manufactured or collected in the country. The Egyptian market currently sees the launch of local collection or manufacturing of the “Hyundai” and “Nissan” marks, while the market awaits the launch of other local cars such as the Malaysian proton and the return of the Egyptian Al -Nasr Motors business to produce new cars. The German company “Volkswagen” studies the production of part of its cars in Egypt, as part of a plan aimed at expanding in new African markets, in light of the decline in demand within European markets. “We are very interested in Egypt as a production center, and we hope we will announce a commercial project in this framework soon,” said Martina Beyn, executive director of the Volkswagen group, in an interview with Bloomberg. In June 2024, Volkswagen Africa signed, and the economy of Qun AA Suez, and the Sovereign Egypt Fund, a memorandum of understanding aimed at conducting feasibility studies to establish a joint factory in the industrial area east of Port, said. On May 27, 2024, the Egyptian company “GV” signed a partnership with the second largest car manufacturer in China in the latest attempt to manufacture electric cars at reasonable prices. According to this agreement, one of the companies at the GV investments in Egypt will begin with the local production of the cheapest model provided by the Chinese FAW group, according to Bloomberg. At the end of 2024, the Egyptian Cabinet announced the signing of a contract with the Chinese company “Seik Motor” to establish a new (MG) manufacturing factory in Egypt, with $ 135 million investments. According to Fahd Ali Al -Ghanem, chairman of the Board of Directors of Al -Ghanem Motor Group and ‘Otto Mobilti’, the Kuwaiti “Al -Ghanem Motors group also conducts discussions with various brands to attract it to Egypt, to ‘BMW’ and ‘Jelly’. Al -Ghanem notes in an interview with Al -sharq, on the sidelines of the opening ceremony of the “Jelly” factory in Cairo early this year, that this factory, which is the first in the Middle East and Africa, increases the group’s investments in Egypt to $ 250 million to continue to pump investments in the country. Al -Ghanem announced the company’s plan to double its productive capacity of 10,000 cars annually, which is aimed at the internal need in the Egyptian market and then exports to the markets of the Middle East and Africa in the next phase. And added that the group is working to increase the local component in the production of cars in Egypt from 45% to more than 50%. Al -Mansour Motors, which have long been linked to a partnership with General Motors, are also looking for electric cars in Egypt and Cadillac cars for import and market. GV Auto plans to host a best E05 in Egypt, which is one of the lowest electric cars in the world, usually used for taxi services on May 27, 2024, about three years ago, Egypt set a goal to determine 3 thousand double stations of 6 thousand shipping points. However, the implementation of this goal was very late, as the number of ship stations is no more than 450, according to the head of the Clean Energy Cars Committee in the Caro Division of the Cairo Chamber of Commerce, Ahmed Zain for Al -Sharq. 5) What are the challenges before localizing the auto industry in Egypt? In spite of the groo t Momentum expressed by the Egyptian government to localize the automotive industry faces the project structural and executive challenges that can open its verification at the required velocity. Khaled Saad, Secretary of General of the Automobile Manufacturers Association in Egypt, has identified several major challenges for the localization of the automotive industry in Egypt, which are geopolitical tension, digital infrastructure and bureaucratic procedures. One of the most important challenges is also the poor infrastructure associated with the industry, especially in the field of electric loading stations. Despite the announcement of the state years ago, plans to set 3000 double stations of 6000 shipping points are only about 450 stations, reflecting a clear gap between plans and implementation. The second challenge is related to the local component percentage. Despite the ambitious goals of increasing it to 60%, some production lines are still very dependent on imported components, exposing it to exchange rate fluctuations and import compications. It threatens the competitiveness of the Egyptian product locally and internationally. As far as the third challenge is concerned, it is related to attracting large and sustainable investments of international enterprises amid strong competition from countries that provide more flexible and legislative incentives. For example, the signed agreements with some major companies, such as the Volkswagen agreement with Egypt, have not yet turned into real investment on the ground. The state also has a challenge in the development of nutritional industries, which is a prerequisite for real and effective relocation. The absence of a strong system for providing parts and components limits the ability of the Egyptian market to independence in production, and it affects the costs and quality of the car. Finally, the problem of the rehabilitation of human cadres that specializes in modern manufacturing, especially with the tendency to produce electric cars, high technical skills that are not currently available on a large scale. Despite these challenges, the success of the project remains possible, provided urgent reforms are implemented, policy stability and the improvement of the investment environment, which will determine whether the $ 630 million investment will be a real start or just another experience until previous efforts will be.