{"id":627340,"date":"2018-07-30T03:39:29","date_gmt":"2018-07-30T03:39:29","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2018\/07\/30\/govt-plans-to-scrap-automotive-directive-and-will-replace-it-with-special-zones\/"},"modified":"2018-07-30T03:39:29","modified_gmt":"2018-07-30T03:39:29","slug":"govt-plans-to-scrap-automotive-directive-and-will-replace-it-with-special-zones","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2018\/07\/30\/govt-plans-to-scrap-automotive-directive-and-will-replace-it-with-special-zones\/","title":{"rendered":"Gov\u2019t plans to scrap Automotive Directive and will replace it with special zones"},"content":{"rendered":"

<\/a> EXCLUSIVE- Gov\u2019t plans to scrap automotive directive, looks to replace it with special economic zones: <\/strong>The Madbouly Cabinet has decided to scrap the automotive directive \u2014 the long awaited government strategy to grow the domestic auto industry by granting local assemblers incentives to move further up the value chain to manufacturing.<\/p>\n

Background: <\/strong>The Automotive Directive had been in the works for over three years now thanks to wrangling in the House of Representatives and opposition by auto importers. The package of incentives was designed to allow local assemblers, who industry backers argue support tens of thousands of skilled direct and indirect jobs, to better compete with European Union, Moroccan and Turkish imports that receive customs breaks here in Egypt. That strategy has been sharply opposed by our EU trade partners \u2014 particularly Germany, whose chancellor, Angela Merkel, is said to have addressed the issue directly with President Abdel Fattah El Sisi.<\/p>\n

The alternative? <\/strong>The government is looking to replace the automotive directive with a policy of setting up special auto industry freezones that would offer a range of as-yet unspecified tax and customs breaks to assemblers, a senior government source with direct knowledge of the move told Enterprise. Among the incentives would tax and customs exemptions for capital goods imported for local assembly, the source said. Our source noted that the ministries of trade and industry, finance, and investment are currently working on studies that would back the new policy, but did not say when the proposal might be officially unveiled. The policy will likely emulate others adopted by regional players<\/strong> including Morocco and South Africa.<\/p>\n

Higher local content requirements part of the proposal? <\/strong>Manufacturers looking to join the proposed program would be required to source 60% of their components here at home, the source said. That\u2019s a significantly higher rate than the 46% domestic component requirement mandated by former Trade and Industry Minister Tarek Kabil in April<\/a> to push forward the transition towards the automotive directive.<\/p>\n

The source noted that the government plans to pitch the new policy to foreign auto companies that sell cars here<\/strong> in the hope of spurring foreign direct investment in the sector. A number of auto companies are on record as saying they were awaiting the automotive directive before committing to new assembly lines. These include Toyota<\/a> and China\u2019s GAC Motor<\/a>. Others including Fiat and Volkswagen were said<\/a> to be exploring manufacturing opportunities in Egypt but were awaiting clarity from the government on its auto industry policy.<\/p>\n

This significant change in direction by the government comes as Egypt has 154 days before 1 January<\/strong> \u2014 that\u2019s when customs on EU manufactured cars fall to zero, a prospect that could see top assemblers close down assembly lines.<\/p>\n","protected":false},"excerpt":{"rendered":"

EXCLUSIVE- Gov\u2019t plans to scrap automotive directive, looks to replace it with special economic zones: The Madbouly Cabinet has decided to scrap the automotive directive \u2014 the long awaited government strategy to grow the domestic auto industry by granting local assemblers incentives to move further up the value chain to manufacturing. Background: The Automotive Directive […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8572],"tags":[72,2380],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-627340","post","type-post","status-publish","format-standard","hentry","category-speed-round","tag-enterpriseam","tag-speed-round","wpautop","entry"],"acf":{"mongo_id":"9333ab18-d768-4669-a34c-ae8379e057b5","order":"0","is_powered_by":true,"story_type":"1","photo_url":"","photo_position":"above","related_issue":[627335],"teaser":"","voice_url":""},"yoast_head":"\nGov\u2019t plans to scrap Automotive Directive and will replace it with special zones - EnterpriseAM Egypt<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/egypt\/2018\/07\/30\/govt-plans-to-scrap-automotive-directive-and-will-replace-it-with-special-zones\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Gov\u2019t plans to scrap Automotive Directive and will replace it with special zones\" \/>\n<meta property=\"og:description\" content=\"EXCLUSIVE- Gov\u2019t plans to scrap automotive directive, looks to replace it with special economic zones: The Madbouly Cabinet has decided to scrap the automotive directive \u2014 the long awaited government strategy to grow the domestic auto industry by granting local assemblers incentives to move further up the value chain to manufacturing. 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The Ministry of Trade and Industry issued yesterday a statement denying our report of Monday morning that the government plans to scrap the long-delayed automotive directive, which was designed to transform Egypt\u2019s automotive assembly industry into a manufacturing and export power. A senior government\u2026","rel":"","context":"In "Speed Round"","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":595540,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/09\/30\/govt-looking-to-impose-development-tax-on-cars\/","url_meta":{"origin":627340,"position":2},"title":"Gov\u2019t looking to impose development tax on cars","author":"enterpriseam admin","date":"30 September 2019","format":false,"excerpt":"EXCLUSIVE- Gov\u2019t mulls industry-wide development tax for the automotive industry: The government is considering imposing a development tax on all imported and locally produced cars, two government sources told Enterprise. 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