Egypt earmarks EGP 5.5 bn for new automotive export subsidies

The wheels are in motion on the state's export subsidy program as the automotive industry is set to receive bumps ranging from 4.5-5.5%. This puts it on par with the support given to the engineering industry, a government official tells EnterpriseAM.

Revving up: The decision — which includes bus and component manufacturing — is expected to unlock significant production capacity and drive a surge in fresh foreign investment interest. Automotive Industry Development Program (AIDP) aims to establish Egypt as a regional vehicle manufacturing hub, with a target of 100k vehicles produced annually and local component content starting at 20% — gradually rising to 60% value-added.

Why this matters: Increasing export revenues is great, but the real value-add here is that the program should require automakers to follow AIDP’s mandate and use a specific ratio of local components when building the cars. This will encourage manufacturers to move beyond just assembling cars — their current MO — to actually building them from the ground up.

The Finance Ministry has earmarked EGP 5.5 bn for the industry’s inclusion in the program for FY 2026/2027, according to budget documents seen by EnterpriseAM. The government also wants to add four new companies to the program to kick off local manufacturing, our source tells us, with several EV makers also in talks with officials about launching export-oriented projects.

MEANWHILE– Long-time program member Volkswagen Group is also preparing to begincontract manufacturing with the Egyptian German Automotive Company plant before embarking on an integrated automotive factory in East Port Said, we’re told.

What’s next? The Engineering Export Council is targeting a 15% annual growth rate for the sector, aiming for USD 13.5 bn in exports by 2030, Chairman Sherif El Sayyad tells us. With February exports already up 30% y-o-y, it seems like we’re on the right track, especially as wartime disruptions in the Strait of Hormuz push the demand for Egyptian exports higher, El Sayyad argues.