{"id":627387,"date":"2018-07-31T03:49:10","date_gmt":"2018-07-31T03:49:10","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2018\/07\/31\/trade-minister-denies-automotive-directive-is-being-scrapped\/"},"modified":"2018-07-31T03:49:10","modified_gmt":"2018-07-31T03:49:10","slug":"trade-minister-denies-automotive-directive-is-being-scrapped","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2018\/07\/31\/trade-minister-denies-automotive-directive-is-being-scrapped\/","title":{"rendered":"Trade Minister denies Automotive Directive is being scrapped"},"content":{"rendered":"

<\/a> Is the automotive directive still alive? <\/strong>The Ministry of Trade and Industry issued yesterday a statement denying our report of Monday morning<\/a> 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 official with direct knowledge of plans drawn up by the Ministry of Trade and Industry was our source on the original story. The official spoke on condition of anonymity.<\/p>\n

What\u2019s the ministry saying?<\/strong> The statement<\/a> says our report was untrue, but notes that officials are reviewing the current policy with an eye towards a vision for the industry and a strategy for its development. It added that the development of the local auto industry is a top a priority for the ministry \u2014 \u201cas is the case with any other industry.\u201d<\/p>\n

What our source claims the Trade Ministry is proposing:<\/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 could be 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 including Morocco and South Africa.<\/p>\n

So, where do things stand? <\/strong>Two well-sources with whom we spoke yesterday confirmed the proposal to scrap the directive in favour of Moroccan-style incentives and special economic zones is very much alive and has been presented to the cabinet.<\/p>\n

How does this compare with the automotive directive?<\/strong> Both policy directions ostensibly aim to give local assemblers protection against less-expensive imports by giving them incentives to move up the value chain into manufacturing. The automotive directive was a blanket policy for the industry, not based on specific zones or geographies. And it would not have required direct payouts to manufacturers: The original draft<\/a> of the automotive directive set a minimum production and export requirement to benefit from incentives, which include tax and customs breaks of 23.1%-57.5% of the sales price of the car, varying by engine size and proportional to the percentage of domestic components used to assemble the vehicle.<\/p>\n

Why incentives may not be the way forward:<\/strong> Similar programs in Morocco and Turkey to which our source says the government has referred provide cash rebates or subsidies of 20-30% on a manufacturer\u2019s investment cost. Industry players with whom we\u2019ve spoken in the past day put that at a cost to the taxpayer of some USD 500 mn per plant. Moving up the component value chain to require 60% of content be domestic would required further bn\u2019s of USD worth of investment \u2014 this at time when the industry is simply too small to support something of that size.<\/p>\n

In any case, the clock is ticking:<\/strong> We have five months and one day before cars assembled in the EU enjoy customs-free access to the Egyptian market, a fact that would imperil thousands of skilled manufacturing jobs (both direct and indirect). Our take is that this is the industry\u2019s last chance to get on a footing that could one day see our exports be regionally competitive. To lose jobs and future economic opportunity for lack of a clear policy would be a shame. Whatever cabinet plans to do with the industry, now is the time to make it clear \u2014 foreign investors won\u2019t come pouring in until the regulatory framework and the fate of existing domestic players is clear.<\/p>\n","protected":false},"excerpt":{"rendered":"

Is the automotive directive still alive? 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 official with direct knowledge of […]<\/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-627387","post","type-post","status-publish","format-standard","hentry","category-speed-round","tag-enterpriseam","tag-speed-round","wpautop","entry"],"acf":{"mongo_id":"6aa0b97a-468c-41d0-9324-2305d131a938","order":"0","is_powered_by":true,"story_type":"1","photo_url":"","photo_position":"above","related_issue":[627382],"teaser":"","voice_url":""},"yoast_head":"\nTrade Minister denies Automotive Directive is being scrapped - 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\/31\/trade-minister-denies-automotive-directive-is-being-scrapped\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Trade Minister denies Automotive Directive is being scrapped\" \/>\n<meta property=\"og:description\" content=\"Is the automotive directive still alive? 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. 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The decision also mandates\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":647479,"url":"https:\/\/enterpriseam.com\/egypt\/2017\/05\/11\/trade-ministry-to-amend-automotive-directive\/","url_meta":{"origin":627387,"position":1},"title":"Trade Ministry to amend automotive directive","author":"enterpriseam admin","date":"11 May 2017","format":false,"excerpt":"Trade Ministry to amend the proposed automotive directive? The Trade and Industry Ministry is reportedly looking to revisit unspecified sections of the so-called \u201cautomotive directive\u201d before sending it back to the House of Representatives for review and a final vote, Al Mal said on Wednesday. The news comes a little\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":604408,"url":"https:\/\/enterpriseam.com\/egypt\/2018\/12\/03\/trade-minister-downplays-automotive-directive-says-talks-are-ongoing-with-unnamed-global-car-manufacturers-on-egypt-investments\/","url_meta":{"origin":627387,"position":2},"title":"Trade minister downplays \u2018automotive directive,\u2019 says talks are ongoing with unnamed global car manufacturers on Egypt investments","author":"enterpriseam admin","date":"3 December 2018","format":false,"excerpt":"Trade Minister: Please stop asking about the \u201cautomotive directive.\u201d Trade and Industry Minister Amr Nassar threw cold water on years spent crafting the \u201cautomotive directive\u201d that would have given incentives to local assemblers to move further up the value chain into manufacturing in return for a measure of protection against\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\/2021\/2\/31.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":646318,"url":"https:\/\/enterpriseam.com\/egypt\/2017\/06\/12\/trade-and-industry-ministry-form-committee-to-resolve-issues-with-the-automotive-directive\/","url_meta":{"origin":627387,"position":3},"title":"Trade and Industry Ministry form committee to resolve issues with the automotive directive","author":"enterpriseam admin","date":"12 June 2017","format":false,"excerpt":"Trade and Industry Ministry forms committee to break deadlock over automotivedirective: The Trade and Industry Ministry is forming a committee of Federation of Egyptian Industries and Industrial Development Authority (IDA) officials to look into resolving the deadlock on the automotive directive, Al Borsa reported last Thursday. The move is the\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":625696,"url":"https:\/\/enterpriseam.com\/egypt\/2018\/08\/13\/govt-to-have-automotive-directive-ready-by-the-fall\/","url_meta":{"origin":627387,"position":4},"title":"Gov\u2019t to have automotive directive ready by the fall","author":"enterpriseam admin","date":"13 August 2018","format":false,"excerpt":"LEGISLATION WATCH- We\u2019ve heard this one before \u2014 gov\u2019t to have automotive directive ready by the fall: The Trade and Industry Ministry is planning to have the automotive directive drafted and ready before the House of Representatives reconvenes for the fall legislative session in October, Nassar said at a presser\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":621651,"url":"https:\/\/enterpriseam.com\/egypt\/2018\/11\/14\/finmin-trade-ministry-looking-to-amend-automotive-tax-framework-as-tariffs-on-european-cars-set-to-drop-to-zero\/","url_meta":{"origin":627387,"position":5},"title":"FinMin, Trade Ministry looking to amend automotive tax framework as tariffs on European cars set to drop to zero","author":"enterpriseam admin","date":"14 November 2018","format":false,"excerpt":"EXCLUSIVE- Last gasp of the automotive directive? A senior government official tells us the trade and finance ministries are studying a proposal that would impose a 10-20% \u201cdevelopment fee\u201d on all car sales \u2014 but then offset these for locally assembled or manufactured vehicles, which would be eligible for discounts\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":[]}],"_links":{"self":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/627387","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/comments?post=627387"}],"version-history":[{"count":0,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/627387\/revisions"}],"acf:post":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/issue\/627382"}],"wp:attachment":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/media?parent=627387"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/categories?post=627387"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/tags?post=627387"},{"taxonomy":"brand","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/brand?post=627387"},{"taxonomy":"newspack_spnsrs_tax","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/newspack_spnsrs_tax?post=627387"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}