The government is putting together new incentive criteria and additional benefits for automakers participating in the Automotive Industry Development Program in a bid to boost local component rates to 65% from 45%, a government source told EnterpriseAM.

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The lay of the land: The revised incentive framework introduces a new methodology for calculating local component requirements and value-added metrics, according to a statement by the Industry Ministry. The framework will be presented to Prime Minister Moustafa Madbouly before being submitted to President Abdel Fattah El Sisi for final approval.

The revised program includes new customs concessions to speed up the import of inputs for local manufacturers and sets minimum vehicle production targets, our source said. Program funds will be distributed to manufacturers through the central clearing system within three months following production, they added.

ICYMI- The Finance Ministry is considering exempting imported auto parts used in manufacturing from the 3% state development fee to, instead, collect the fees upon commercial sales and during license renewal. The move comes amid other initiatives to help localize the auto industry, including an expanded EGP 3 bn AIDP.

The initiative to boost the localization of auto components aims in part to cater to international trade agreements, our source said, adding that insufficient local component rates were among the obstacles behind a trade dispute with Morocco earlier this year.

REMEMBER- In February, Morocco held up some 150 containers of Egyptian goods in Moroccan ports in an attempt to rebalance the two countries' trade relationship. The two countries have been working to strengthen trade relations in recent months, with Egypt’s latest efforts focusing on a plan to ramp up imports from our Arab neighbor to USD 600 mn.

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