{"id":587977,"date":"2023-06-04T00:00:00","date_gmt":"2023-06-04T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/egypts-automotive-industry-has-the-potential-to-become-the-largest-on-the-continent-african-association-says\/"},"modified":"2023-06-04T00:00:00","modified_gmt":"2023-06-04T00:00:00","slug":"egypts-automotive-industry-has-the-potential-to-become-the-largest-on-the-continent-african-association-says","status":"publish","type":"inside_industry","link":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/egypts-automotive-industry-has-the-potential-to-become-the-largest-on-the-continent-african-association-says\/","title":{"rendered":"Egypt\u2019s automotive industry has the potential to become the largest on the continent, African association says"},"content":{"rendered":"

<\/span>African automotive association sees Egypt as Africa\u2019s biggest automotive market <\/span>in the next decade<\/span>:<\/span> A delegation of automotive and automotive components producers attended a meeting of the <\/span>African Association of Automotive Manufacturers<\/a><\/span> (AAAM) yesterday to look at potential investments in Egypt\u2019s automotive industries. Participants Enterprise spoke <\/span>with<\/span> at the meeting yesterday <\/span>see<\/span> potential for Egypt\u2019s automotive industry to become the largest market in the continent by the middle of the next decade, supported by existing incentives and market dynamics, along with government plans to localize the industry. <\/span><\/p>\n

What went down at the meetings:<\/span> The AAAM delegation toured EP, where they met with key<\/span> figures from Egypt\u2019s automotive industry, government officials, and existing investors to get a feel for the current market dynamics and incentives on offer for the industry, as well as the challenges and future prospects. \u201cThe purpose of the visit is to introduce what Egypt has to offer to the automotive market, and show how serious the stakeholders are \u2014 mainly the government and the private sector and companies that have already invested, like Nissan. We hope to create the right level of understanding based on which different automotive players can make their own investment decisions,\u201d AAAM President and Nissan Motor Corporation\u2019s Group Strategic Advisor for Policies, Political Affairs, and External Relations Mike Whitfield told Enterprise.<\/span><\/p>\n

Who was there:<\/span> Representatives from automotive manufacturers and automotive component<\/span> suppliers joined the delegation, including from Volkswagen Group South Africa, Toyota South Africa Motors, General Motors Egypt, and Robert Bosch-Africa, in addition to prominent players in Egypt\u2019s automotive industry. Also joining them were several government officials, including Trade and Industry Minister Ahmed Samir and Suez Canal Economic Zone (SCZone) head Walid Gamal Eldin, as well as representatives from the SMEs Authority, the Trade and Industry Ministry\u2019s automotive manufacturing unit, and the East Port Said Development Company. <\/span><\/p>\n

Egypt is already on the map, but it\u2019s poised to be the leader:<\/span> \u201cToday if we<\/span> look at the automotive industry in Africa, some 1.1 mn vehicles are produced every year \u2014 700k of which come out of South Africa, Morocco, and Egypt,\u201d Whitfield told Enterprise. Egypt currently accounts for the smallest portion of that number, with just 100k vehicles produced every year, compared to 500k in each of South Africa and Morocco. \u201cBut if we look at market trends, Egypt is headed to become the most significant \u2014 and potentially the biggest \u2014 market. We believe that Egypt can reach that milestone <\/span>within the next 10 years<\/span>,\u201d he said. <\/span><\/p>\n

In case you needed reminding: Egypt really wants to develop + localize the automotive<\/span> industry:<\/span> The government has been working on a national strategy to develop the automotive industry, known as the Automotive Industry Development Program (AIDP), which could be implemented in the back half of this year, sources from the Trade and Industry Ministry <\/span>previously told Enterprise<\/a><\/span>. AIDP will provide incentives to carmakers in a bid to increase local assembly and component manufacturing here, up the sector\u2019s competitiveness to become a regional manufacturing hub, and bolster export volumes. <\/span><\/p>\n

What we already have going for us:<\/span> The Egyptian market has attractive demographics,<\/span> including a large population, supportive infrastructure, as well as proximity to other markets and streamlined logistical processes, and attractive construction, energy, and labor costs, several participants noted. Investors in EP specifically are able to enjoy 100% customs exemptions, a five-year residency in exchange for investments, as well as special rules governing imports and exports through the SCZone, according to EP Chairman Karim Sami Saad. End products manufactured in SCZone facilities are also treated as local products, Sami Saad noted. <\/span><\/p>\n

Businesses want to see a fully formed local industry in Egypt that caters to the rest of<\/span> the continent:<\/span> \u201cEgypt's potential is not only important for Egypt, but for the whole African continent. As Nissan, we have invested in Egypt for several years, and we see Egypt as a key manufacturing hub for us in Africa and exporting into Africa. The objective is not just to import car components and put it together \u2014 the objective is to create real localization,\u201d Whitfield told Enterprise. <\/span><\/p>\n

Egypt wants to position East Port Said as a hub for the automotive industry, with plans to<\/span> set up a specialized zone for automotive manufacturing<\/span>, which will be named the East Port Said Automotive Zone, or EPAZ, according to AAAM Vice President and EP Managing Director Ahmed Fikry. EP is looking to \u201cattract a number of different brands from global automobile manufacturers to participate in a joint automotive manufacturing complex,\u201d he said. EP is already a \u201cprime destination\u201d for the automotive industry to leverage local and global partnerships \u201cto create a thriving automotive ecosystem that attracts investments, fosters innovation, and drives economic growth,\u201d Saad said. <\/span><\/p>\n

Investors want to see more \u2014 and gov\u2019t is all ears:<\/span> \u201cThe government is here to listen to the<\/span> business community and help offer whatever is needed to bring this industry to its full potential,\u201d Samir said at the conference. <\/span><\/p>\n

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