{"id":641507,"date":"2017-09-25T04:16:21","date_gmt":"2017-09-25T04:16:21","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2017\/09\/25\/battle-royale-of-the-auto-sector\/"},"modified":"2017-09-25T04:16:21","modified_gmt":"2017-09-25T04:16:21","slug":"battle-royale-of-the-auto-sector","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2017\/09\/25\/battle-royale-of-the-auto-sector\/","title":{"rendered":"Battle Royale of the auto sector"},"content":{"rendered":"

<\/a> Battle Royale of the auto sector \u2014 importers and local assemblers duke it out in th<\/strong>e press over economy and Automotive Directive:<\/strong> Tensions between auto importers and local assemblers were evident at this year\u2019s Automech Formula, with both corners taking to the pages of Al Borsa to debate their visions for the future of the industry and the economy.<\/p>\n

In the red corner and standing for the assemblers was GB Auto Chairman Raouf <\/strong>Ghabbour, who said that delays in passing the Automotive Directive had not hurt the automotive sector<\/strong>, but rather it delayed its development and growth. He warned, however, that scrapping the bill \u2014 which has stalled in parliament thanks to a concerted lobbying effort by importers \u2014 may lead to downsizing at auto factories and even some of them closing down, allowing the industry to be addicted to imported vehicles. He expressed confidence that the government was adamant about passing the act, which would give assemblers incentives to go further up the value chain into manufacturing, giving them a measure of protection against what they say are unfair benefits enjoyed by Turkish, EU and Moroccan imports.<\/p>\n

Ghabbour defended the central bank\u2019s decision to raise interest rate hikes<\/strong>, saying the move was a necessary reaction to counter the inflation resulting from the EGP float. In an extensive interview with Al Borsa<\/a> on the economy, Ghabbour said that the lifting of subsidies also necessitated the interest rate hikes, saying he believes that the CBE\u2019s monetary policy is in place for the \u201cgreater good\u201d of the economy even though the float of the EGP has cost his company some USD 100 mn. He expects that the CBE will ease interest rates towards the end of 2017 or early 2018 as inflation gradually eases. With characteristic wit, Ghabbour shot down any suggestion that the private sector is owed compensation from the state as a result of changing exchange rate and monetary policies (you hear that, contractors?).<\/p>\n

As for future plans by GB Auto, Ghabbour announced that the company plans to invest <\/strong>EGP 800 mn in the Suez Canal Economic Zone<\/strong>, adding that negotiations on that investment with the government are ongoing. He said that the company\u2019s strategy for the most part to adapt to the economic challenges had been to expand its financing and after-sales services divisions.<\/p>\n

The Importers hit back:<\/strong> Ghabbour\u2019s sentiment on the state of the sector naturally drew some opposition from pure importers, whose statements to the press at Automech Formula did little to disguise their disdain for the government\u2019s monetary and export-focused trade policies. In a separate interview with the newspaper<\/a>, Karim Naggar, head of Kayan Egypt \u2014 SEAT\u2019s licensed distributor in Egypt \u2014 disparagingly called the CBE\u2019s monetary policies confusing for the sector. \u201cAusterity measures\u201d including the interest rate hikes have led to liquidity drying up in the nation, causing a 50% decline in auto sales and making it impossible to keep replacement parts in stock. Taking the short-term view, he also criticized trade policies, saying that curbing imports would deny the government much-needed customs revenues.<\/p>\n

Naggar did not mince words in his objections to the Automotive Directive<\/strong>, saying that without setting quality control standards, Egyptian auto exports would not be able to compete. The proposed bill would not enforce such measures, he said, calling it a \u201cprotectionist\u201d piece of legislation. His major gripe, however, lies in the \u201cdamage this would have to Egypt\u2019s trade agreements with its largest trading partner, Europe.\u201d<\/p>\n

As for future plans by Kayan<\/strong>, Naggar revealed that the company is in talks with Bavarian Auto Group and the Egyptian German Automotive company to partner an auto parts factory, with an eye towards exporting drum brakes and car wiring to Volkswagen.<\/p>\n","protected":false},"excerpt":{"rendered":"

Battle Royale of the auto sector \u2014 importers and local assemblers duke it out in the press over economy and Automotive Directive: Tensions between auto importers and local assemblers were evident at this year\u2019s Automech Formula, with both corners taking to the pages of Al Borsa to debate their visions for the future of the […]<\/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":[7279],"tags":[72],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-641507","post","type-post","status-publish","format-standard","hentry","category-spotlight","tag-enterpriseam","wpautop","entry"],"acf":{"mongo_id":"aa64e59e-5d36-43e1-b938-eb893aa529c4","order":"0","is_powered_by":true,"story_type":"1","photo_url":"","photo_position":"above","related_issue":[641488],"teaser":"","voice_url":""},"yoast_head":"\nBattle Royale of the auto sector - 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At issue now: They\u2019re demanding the Trade and Industry Ministry revisit 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":634530,"url":"https:\/\/enterpriseam.com\/egypt\/2018\/01\/17\/german-consultancy-to-conclude-its-assessment-of-automotive-directive-in-one-month\/","url_meta":{"origin":641507,"position":2},"title":"German consultancy to conclude its assessment of Automotive Directive in one month","author":"enterpriseam admin","date":"17 January 2018","format":false,"excerpt":"The German consultancy firm hired to advise on the redrafting of the Automotive Directive should complete its work within a month, sources familiar with the matter tell Al Masry Al Youm. Industrial Development Authority head Ahmed Abdel Razek had said last month that the final draft of the law \u2014\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":653074,"url":"https:\/\/enterpriseam.com\/egypt\/2017\/01\/29\/car-importers-to-send-house-report-with-their-requests-for-automotive-directive\/","url_meta":{"origin":641507,"position":3},"title":"Car importers to send House report with their requests for automotive directive","author":"enterpriseam admin","date":"29 January 2017","format":false,"excerpt":"Auto importers look to dominate the debate on the automotive directive: Car importers and auto feeders are looking to stake their claim over the automotive directive as the House of Representatives resumed discussions on the legislation last week following an announced hiatus. Importers, including Volkswagen, Seat, Kia Motors, and Ford\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":627340,"url":"https:\/\/enterpriseam.com\/egypt\/2018\/07\/30\/govt-plans-to-scrap-automotive-directive-and-will-replace-it-with-special-zones\/","url_meta":{"origin":641507,"position":4},"title":"Gov\u2019t plans to scrap Automotive Directive and will replace it with special zones","author":"enterpriseam admin","date":"30 July 2018","format":false,"excerpt":"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\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":651739,"url":"https:\/\/enterpriseam.com\/egypt\/2017\/02\/20\/house-to-conclude-automotive-directive-discussions-next-week\/","url_meta":{"origin":641507,"position":5},"title":"House to conclude Automotive Directive Discussions next week","author":"enterpriseam admin","date":"20 February 2017","format":false,"excerpt":"And that\u2019s not all, as it seems there is light at the end of the tunnel that is the House for the automotive directive. 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