The development of the Egyptian automotive industry started during the 1960s during the socialist era, at which the Egyptian government managed to transform the country from an agricultural economy to an industrial one, and that time the first completely Egyptian car was produced which was called Ramses Auto. The car soon went out of production, as it was unable to compete with foreign imported brands, especially following the end of socialism and the move toward a more liberal market.

Starting from 2004, the Egyptian automotive market began to expand exponentially, along with the production of locally assembled cars. The total local production market in Egypt consisted of only 49,335 vehicles in 2004. This figure rose to 116,683 vehicles in 2010; a 136% increase. However, due to the political changes starting in 2011, production went down by 31% in 2012. In 2013, Egypt was the third largest car-producing market in Africa, after South Africa and Morocco.

 

Now the Egyptian automotive assembly business has developed with several assembly lines in Egypt relying on mostly imported components (i.e. 60% imported vs. 40% local) manufacturing now around 100,000 vehicles annually of passenger cars, light commercial vehicles, trucks, and buses, as well as 300 factories that produce local automotive components. Besides GM assembly line in Egypt, giants such as BMW, Mercedes, Nissan, and Jeep produce a majority of their product line in their factories in Egypt. In fact, the BMW assembly line in Egypt is the only factory outside Germany where the BMW 7 Series is being produced.

 

Egypt’s automotive market is growing due to the recent increase in car loans. Egypt is considered of the fastest growing automobiles market in the MENA region in terms of number of vehicles. As of October 2013 5.6 million vehicles are registered in Egypt’s Traffic Authority, 32% of which are more than 17 years old. The market is experiencing a steady demand increase of an average 190,000 vehicles per year.

 

The Egyptian passenger cars market continued its recovery in YR2014, with a 28.9% growth in unit sales compared to YR2013. The strongest growth was seen in smaller engine sizes (1.3-1.6L vehicles) and in the more affordable cars.

 

The Egyptian passenger car market is showing signs of sustainable recovery as the country’s political situation have now stabilized and consumer attitude is beginning to show signs of a confidence. Market-wide, passenger car sales in YR2014 went up by 30% over YR2013, with models from German, Japanese, South Korean and Chinese brands all posting increases.

 

The Egyptian Automotive Marketing Information Council (AMIC) recently released YR2014 Passenger Car Annual Value Report. The report analyzes passenger car sales by value and model size. According to this report, in YR2014 the value of passenger cars sold in Egypt rose 26.8%. Vehicles priced in the range of EGP 70,000 to EGP 90,000 accounted for 30.4% of all unit sales, although it was vehicles in the EGP 150,000 to EGP 200,000 range that generated the most value, accounting for 22.4% of the market sales proceeds.

 

The strong existence of the used-cars market in Egypt has led to good opportunities in the aftermarket (i.e. Spare parts market). In countries like Egypt, consumers and businesses usually postpone the purchase of new vehicles, which means consequently increases the expenses associated with maintenance and repairing of older vehicles.

 

Market Main Highlights:

§  Egypt presents a very difficult and often challenging environment for motor vehicle users. Temperatures in the summer can easily reach 50 degrees centigrade with maybe higher temperatures inside closed vehicles.

§  The metropolitan areas are subject to a continuously high degree of sand and dust.

The quality of fuel is said to be uneven, with in some cases a very high level of contaminants.