Egyptian economy is majorly influenced by the auto sector, representing around 3.7% of Egyptian manufacturing output and 1.8% of manufacturing employment annually. On the eve of 4th Egypt automotive conference, market experts and auto manufacturers said that the Egypt’s automotive sector appears to be on track to revival after years of instability, as the industry strategy, which is set to be approved in weeks, is expected to lure fresh investments to the sector.
Managing director of Shell Egypt, Saher Hashem, said that this conference is chance for car industry companies representatives to exchange experiences and views. As Shell is considered a partner in the industry, it now seeks to diversify the sources of profitability in order to restore the market’s strength, he added. Raouf Ghabbour, chairperson of the board of directors of GB Ghabbour Auto, during the opening speech of the summit, said government and investors needs a mutual understanding to promote the car industry in Egypt, and supporting it would results in growth rates for the auto sector that stand at 10% annually.
Moreover, he explained that these development rates will increase citizens’ purchase power, which will result in widening Egypt’s car market, and increasing competitiveness capabilities.
Ghabbour explained that Egypt need to create strong investment strategy, referring to the Morocco experiment with Renault. He pointed that investment incentives are not enough, so the GB Ghabbour Auto did not launch any new projects for 3 years because it is waiting for a clear investment strategy.
Meanwhile, Karim Samy Saad, chairperson of East Port assured that the Suez Canal economic zone is set to support the industry. Zone has several advantages, including the investment law that was issued recently; the production inputs and exports are not subjected to any kind of taxes. He added that it aims creating the Singaporean model in eastern port, and Egypt need clear strategy to keep investments of the current companies that work in Egypt and its investors.
Chairperson of a car manufacturers union, Hussein Mostafa, said that union has to cooperate with associations of government in order to consult them, especially in the supplier industries field and input industries, and main role of union is to support factory development and progress. He added, Egypt's market is narrow and car industries cannot be developed unless the governments create a strong local market. We have to look forward to widen the market, especially in the supplier’s industry field and international markets. Meanwhile, he added that customers’ purchase power retreated as a result of the negative temporary impact of the economic reform programme, followed by a hike in prices.
For his part, Shady Rashad, business development director at Industrial Engineering Company (INDE), said that the number of exported cars is 1,000 annually. This number is considered low as the Egyptian car industry has been available in the international market for 20 years, so Egypt has to review the exported car numbers annually in order to achieve competitiveness.