New regulations for importing cars: The Investment Ministry has issued a decision introducing new restrictions on personal car imports to limit USD outflows and support the localization of the auto industry. The decision caps personal imports at one car every five years and under it importers must provide proof of financial solvency and make the payment through an Egyptian bank.

The fine print: Only diplomats and Egyptians living abroad are allowed to pay for vehicles from outside the country. The rules exempt vehicles already at ports or with completed payments, as well as cars imported by embassies and select international organizations.

Car dealers weren’t happy: Sources told EnterpriseAM that Investment Minister Hassan El Khatib last week met with car dealers to discuss the amount of cars they are looking to import throughout next year, with talks suggesting car dealers will import cars worth some USD 1.8 bn next year. Dealers also raised alarms over personal import loopholes being exploited to bring in luxury cars for resale, skirting commercial rules and draining foreign currency reserves.

The latest in a number of steps taken: The Madbouly government has been working to close a loophole that some have used to import cars without paying the necessary fees. Earlier this year, the cabinet approved a draft decision to amend the executive regulations of the law that governs the rights of people with disabilities, changing up the vehicle import system for those with disabilities, and making it more difficult for people to abuse.

The new rules are being positioned as part of broader efforts to encourage local automotive manufacturing. A government source described the regulations as “governance for the sector” and a necessary step to streamline the market while fostering investments in domestic production. “We are seeing real progress in this area,” the source noted, reflecting optimism about the government’s localization strategy.

Remember: The Madbouly government has been working overtime in efforts to localize the auto industry, most recently introducing the Egyptian Automotive Industry Development Program, which will offer incentives to auto players with the aim of localizing the industry.

** READ MORE: We dive deeper into the efforts to localize Egypt’s auto industry in an Inside Industry published earlier this year. Check out the story here.

A chance to rebalance the market: Egyptian Automotive Dealers Association head Osama Abo El Magd told us that the move will rebalance the market and put an end to consumers playing car dealers — consumers have been profiting from unregulated imports at the expense of licensed agents and dealers.

Price hikes on the horizon? Montasser Zaytoon, member of the FEDCOC’s auto division, told EnterpriseAM that he expects car prices to climb next year as stricter car import rules reduce competition. He cautioned that supply shortages could fuel a resurgence of agents overpricing vehicles.

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