Volkswagen’s plan to make cars in Egypt is still in the cards

Global automobile manufacturing giant Volkswagen is once again talking up its Egypt expansion aspirations, with its Africa Managing Director Martina Biene telling Bloomberg that “we are very interested in Egypt as a production hub and hopefully we can announce a business case anytime soon.”

This is good news for the country’s auto localization efforts, which saw the German automaker announce its interest in helping develop a shared production facility in the East Port Said Industrial Zone all the way back in July 2024 — before disappearing from the news cycle and leading some to think that project may have since been shelved.

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But it’s still unclear to us — and maybe the folks over at Volkswagen too — what they mean by made in Egypt. While Egypt is no stranger to big international car manufacturers locally assembling their vehicles here, we’ve got much less experience hosting factories that manufacture cars. Although the German automaker’s talk of a “production hub” sounds promising, it doesn’t give complete clarity as to whether this will involve manufacturing. What we do know is that VW “could first establish an assembly unit by using existing facilities”, then the possible next step laid out is a plan to build a factory, Biene said — but we will have to wait to see if this will just be for assembly or actually manufacturing vehicles.

A fully fledged manufacturing project seems more likely now than it did a few years ago, as the company closes factories in Germany for the first time in its nearly 90-year history as it struggles with cheaper competitors and shrinking demand in some parts of the world. In addition to expanding access to the Middle East and Africa, moving manufacturing to Egypt also brings with it significantly lower labor costs.

And it wouldn’t be the first in Africa, with the company already operating a manufacturing plant in South Africa alongside assembly projects in Ghana, Rwanda, and Kenya. The company is planning to open up to five new “production facilities” on the continent in the next 10-15 years, according to the business news information service.