Imported cars are facing an unofficial squeeze ahead of a formal tariff coming by end-August

Imported cars are facing stretched-out customs registration and lower priority for FX, even before a new tariff takes effect. While importers of finished cars are facing these informal challenges, parts and local-content importers are being waved through. A formal tariff on fully-built cars is coming separately by end-August.

The Industry Ministry is “trying to control and organize” the import market, Minister Khaled Hashem said at an Egyptian Center for Economic Studies seminar two weeks ago (watch: runtime, 01:00:56). The comment set off widespread speculation. For importers, it reads as a slow margin and volume squeeze. For everyone else, it’s the clearest signal yet that Cairo wants cars built here, not shipped in, sources across government, independent importers, and manufacturers tell EnterpriseAM.

What’s on the books

Two things are actually official. Since January, Chinese cars have had to come in through official agents and accredited companies, with obligations on local parts manufacturing and after-sales service, sources told EnterpriseAM in December. The trigger came from China, not Egypt, an Industry Ministry source says: Chinese manufacturers switched on warranty coverage only through their own official agents after non-agent importers brought in models built for China or other markets that didn't suit Egyptian buyers — which effectively blocks non-agent importers from bringing in mismatched Chinese models.

There’s also more room to import, not less. The Egyptian government raised this year’s passenger-car import ceiling to USD 2.5 bn from USD 1.8 bn as USD liquidity improved.

The squeeze is real

There have been no new restrictions, secretary-general of the Egyptian Association of Automobile Manufacturers Khaled Saad says. According to Saad, Hashem “completely refuted” the idea, and calls the chatter “just a ‘trend’ with no basis.” Saad points to Law 9 of 2022, already in effect, which requires importers to run nationwide service centers, stock spare parts for 15% of import volume, and include dual airbags.

But Saad acknowledges that the squeeze is real, just “unannounced.” Advance Cargo Information Declaration (ACID) registration for complete vehicles now takes unusually long and can be delayed or blocked outright, Saad says, while currency allocation and approval priority go to parts and local-content importers over finished cars. No new rules — but a deliberate bottleneck.

The shift, in numbers

The decline in personal-use and disabled-persons imports has fed straight into local sales, Saad says. Imports once took 65-70% of the sales against roughly 30% for local products; that’s now flipped, he adds, with local at about 65% and imports down to 35%.

What’s coming

Customs draws a line between how cars clear and what they’ll cost. A Customs Authority official tells EnterpriseAM nothing has changed in clearance rules since 2024, and there are no instructions to change them — a car clears like any other commodity once the importer has an ACID number and clears banking procedures. What’s changing is the tariff: the Supreme Council for Customs Tariffs is preparing amendments on fully-built cars to support local industry, alongside new customs breaks for parts and production inputs, the official said — due as a new tariff structure by end-August.

The monopoly worry

Restricting imports to a narrow set of approved importers could lock in agents’ pricing power, member of the car trade division Montaser Zeitoun tells us. It might limit competition and flatten price differences that customers rely on. Regulation, he argues, shouldn’t come bundled with prohibition, or the market loses real diversity and competition.

Hashem’s remark was an offhand comment with nothing legally binding behind it, says Maged El Tawil, importer and host of Cars by Maged YouTube channel. The real trigger for the squeeze on imported cars was USD volatility tied to the Iran war, he says — the EGP has since recovered from around EGP 53-54 to roughly EGP 49.

EVs are a separate question

The government is also weighing an end to full customs exemptions for imported EVs, a senior government official tells us. EVs now pay just 14% VAT and a 1% schedule tax against a 40-135% duty on traditional cars. Saad doubts higher import costs would do much for local EV manufacturing: the bigger constraint is charging infrastructure, not price, he says — buyers hesitate because they’re unsure where they’d physically charge an EV, and demand hasn’t grown enough to justify building out more stations.