Auto sales inch up in December to 2023 record: Auto sales climbed for a secondconsecutive month in December, hitting their highest level in 2023, according to figures from the Automotive Marketing Information Council (AMIC). Vehicle sales rose almost 5% m-o-m to 10.4k, marking the highest monthly sales volume since September 2022.

December in detail: An 15% m-o-m upstick in truck sales drove the trend, with 1,255 units sold. Passenger cars also rose almost 6% m-o-m to 8,372. However, bus sales dropped 15.2% from the month prior to 788.

It was a rough year for the sector: Total sales volumes for the entire year fell by over half in 2023, dropping to 90.4k vehicles from the 184.8k recorded the previous year. Passenger car sales fell 48% y-o-y to 69.2k units during the year, while bus sales declined 51% y-o-y to 8.5k units and truck sales decreased 62% y-o-y to 12.7k units.

The big picture:The dip in sales can be attributed to the current difficulty in sourcing foreign currency. The demand is high but can not be fulfilled as the FX crunch is limiting supply in the market and giving distributors leverage to hike prices as they please.

The 2024 outlook: The auto sector’s performance for the year will depend on two factors: FX stability and if high demand will continue as the central bank moves forward with the highly-anticipated float of the EGP.

SOUND SMART- Cars have become one of several safe haven assets Egyptians have been putting their money into to hedge against a weakening EGP, alongside gold and real estate. This makes it somewhat difficult to differentiate the real demand for cars from artificial demand.

Don’t expect the slump in car sales to end anytime soon: The head of Chamber of Commerce's auto division Nour Darwish thinks that the recent strengthening of the EGP on the parallel market will further reduce car sales, Al Mal reports. Darwish argues that potential buyers will postpone buying a car on the assumption that a strengthening EGP will lead to a decline in car prices.

The caveat: AMIC figures reflect data contributed by member distributors, who include most (but not all) industry participants.

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