Automotive industry in Egypt

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The automotive industry in Egypt has been developing for 50 years. It can sale more than 200,000 of all types of vehicles annually and now becomes the second biggest market in Africa and the 42nd largest in the world, with an annual production output of over 70,000 vehicles. After experiencing many failures and success, the Egypt Automotive industry is more focus on assembling operation rather than Manufacturing.[1]

The Evolution of Automobile Industry[edit]

1960s[edit]

The automotive industry in Egypt started in 1960 which the Egypt government started the first automobile company called EI Nasr Automotive Manufacturing Company.[2] It was the first Arab vehicle manufacturer and it was state-owned. [2]The company mainly produced the Fiat-based vehicle due to the engineering and designed problems and the company also assembled foreign licensed cars under its brand.[2] After years of development, they came up their own product such us Nasr 128 GLS which was the best-selling model at that time.[2]

The Open-Door Policy[edit]

In 1974, The president Sadat of Egypt initiated an Open Door Economic Policy (ODEP). Many foreign companies and capital entered Egypt automobile market in the 1980s. In 1985, the General Motors (GM) started a joint venture with Al-Monsour Automotive Company which was a local importer and car dealer in Egypt.[3] At the beginning of the 1990s, the Egypt government adopted the Economic Reform and Structural Adjustment Program(ERSAP).[4] It attracted many foreign companies entered the Egypt market to build their factories and assembly lines.[4] There were many big companies such as Citroen, Fiat, Hyundai, Mercedes-Benz, Nissan, BMW and so on.

January 25 Revolution[edit]

The Arab Spring

In 2010, the vehicles production was increased to 116,683 and it was the best time in Egypt automobile industry.[5] However, the Egyptian revolution of 2011 so-called the January 25 revolution.[6] Beginning in December 2010, it is a revolution about overthrowing the Hosni Mubarak government. During that period, it made significant harm to the automotive industry in Egypt. Nissan suspended its production in Egypt for safety reason after the government protests and the company can assembles 10,000 cars annually.[7] Tokyo Motor stoped their SUV assembly business in Egypt due to the situation.[7] Many Korean companies such as Samsung, LG, and Hyundai Motor had to give up their normal business in Egypt due to the spread of protests, and a lot of employees were forced to go back to Korea or to a third country.[7] BMW sent back German nationals to their country because of the violent-demonstrations. Other automakers like Daimler and GM had temporarily suspended operations. [8]Due to the political changes, the production went down 30% in 2011 and remained down in the next few years. [9] And the total car production in 2017 is only 36,640.[10]

Domestic automotive industry   [edit]

Automotive Industry is one of the most important industry in Egypt and it brings a lot of benefits for the economy of the country. In the 1980s, EI Nasr Automotive Manufacturing Company was the only giant manufacturer in the whole Egypt market. There are now 83 car-manufacturers in Egypt.[11] It has giants like GM, BMW, Hyundai, Toyota and Nissan produce their main product line in Egypt's factories. There are more than 15 car assembly factories and 75 facilities in the country providing more than 75,000 job opportunities.[12] It has the capacity to produce 300,000 passenger cars, light commercial vehicles, trucks, and buses per year.[12] Especially, It is an under-penetrated automobile market with large numbers of young population. The demand is increasing every year and has big potential.[12] There is only an average of 35 Egyptians owning a car out of every 1000.[12] The number in Algeria is 130 out of 1000 which is four times large than Egypt.[12]

However, the Egyptian pound cause the negative impact to imports of car parts due to its weakening.[12] It made the assembly parts more expensive and cause the substantial impact on the vehicles' selling price and the cost of production and subsequently.[12] It is difficult for domestic producers to compete with European exporters and large-scale Asian due to the small market.[12] At the end, the existing assemblers will look for companies that have high sales volume in the country.[12]

The Egypt government has signed the Tripartite Free Trade Agreement which allow free trade in 26 countries of the Common Market for Eastern and Southern Africa(COMESA).[12] It gives a lot of confident to the export of Egypt. The economy of Africa is increasing and the car demand is booming across the board.[12]


Car Manufactures in Egypt[edit]

1. Al Fotouh Car Assembly Company

2. Arab American Vehicles

A joint venture between the Arab Organization for Industrialisation (51%) and the Chrysler Group LLC (49%). Producing military and civilian vehicles.

3. El-Tramco

4. General Motors Egypt S.A.E

Egypt car.jpg

A joint venture with the local importer and car dealer Al-Monsour Automotive Company. The factory is located in the 6th of October City. The company doesn't belong to the General Motors Company, It is a joint venture with the car dealer and local importer Al-Monsour Automotive Company.

5. Ghabbour Group

A car manufacturer founded in 1940. The largest car manufacturer in Egypt producing 150,000 units annually. The company manufactures cars for Bajaj Auto, Hyundai and Volvo.

6. JAC Motor

JAC Motor is state-owned car manufacturer. The company was founded in 1964 and listed on the Shanghai Stock Exchange in 2001.

7. Mercedes Egypt

Established as a wholly owned subsidiary of Daimler AG in December 1999.[13] Assembling for the Mercedes Benz vehicles.

8. Suzuki Egypt

Assembling for Suzuki passenger vehicles.

The Suzuki 800

9. Wagih Abaza Company

Assembling for the Peugeot 405.

10. The Bavarian Auto Group

A company for manufacturing and selling BMW vehicles on the local market. It was founded by BMW in March 2003 and located in 6th of October City.

11. Speranza Motors, Ltd

An Egyptian auto manufacturer based in Maadi, Cairo It is a part of the Daewoo Motor Egypt (DME) which itself belongs to the Aboul Fotouh Group. The factory is located in the 6th October City.

12. The Seoudi Group

An Egyptian automobile manufacturer which was founded in 1975. The company produces Nissan Vehicles located Thai Trade Center, Cairo Sherif Yehya 9.

13. Egyptian German Automotive Company

An Egyptian car assembler was founded by former Daimler-Benz CEO and Samy Saad as a joint venture to assemble vehicles of the Mercedes-Benz brand. It is located in the 6th October City Assembling Mercedes Benz vehicles.

14. El Nasr Automotive Manufacturing Company

It was the first Arab vehicle manufacturer and it was state-owned. [2]The company mainly produced the Fiat-based vehicle due to the engineering and designed problems and the company also assembled foreign licensed cars under its brand.[2]

15. MCV Bus and Coach

A bus bodies manufacturer was founded in 2002.

16. Egy-Tech Engineering

A three-wheeled vehicles manufacturer.

17. Manufacturing Commercial Vehicles

An Egyptian company manufacturing buses and trucks. The factory is located in Salheya.

18. Gorika Egypt

Egypt Automobile Market[edit]

The Egypt automotive market is now focusing on customer experience and it provides a lot of opportunities for some parts.[14] Geographical diversification model is one of the most important strategies for automobile manufacturers to keep competitive and profitable.[14] All the giant companies in Egypt are focusing on auto-drive technology.[14] The government plays a strong role in the automobile industry to encourage and develop.[14] However, it costs a lot of money to invest in environmental pollution regulation.[14]

Production[edit]

As a 90 million population country, the production that only average less than 10,000 per year is unable to keep up with the demand. The production in South Africa is 10 times larger than Egypt and the production in Morocco is 5 times larger than Egypt[9]. In 2002, the total number of the production car in Egypt was 45,073.[15] In 2010, the number was increased to 116,683 and it was the best time in Egypt automobile industry.[5] However, due to the political changes(January 25 revolution), the production went down for 30% in 2011.[9] And the total production in 2017 is only 36,640.[10] But the government has strong confidence to boost the car industry in 2018. And the market has given its feedback which the production of the total vehicle went up for 90%.

Selling[edit]

The sales of Egypt market increased 40% in the first half of 2018 compared to the half of 2017.[16] The best-selling year of Egypt automobile industry was 2015 which sold 349,100 new vehicles.[17] And the total selling number of 2005 was 121,437 which is the worst-selling year.[17] Compare to the other two major countries (South Africa and Morocco) in Africa. Egypt comes in second place in the selling market only behind South Africa and followed by Morocco and the sales market still has the capacity to growth due to the large population.

In 2017, Chevrolet was the best-selling brand in the Egypt accounting 22.3% of the automobile market. Chevrolet sold 21,468 cars and it is a 34.7% decrease in its sales compared to 2016 which sold 32,890 cars.[18] Nissan was ranked number two and sold 15,847 vehicles in the first nine months of 2017. It was 16.5% of total marketing sales.[18] Hyundai won third place with 14.1% of total marketing sales and sold 13,613 vehicles.[18] Toyota came next sold 7,930 cars and won 8.2% of market share.[18] Mitsubishi was in fifth place with 5% of total sales during 2017 and sold 4804 cars. Chery came in next at sixth position with 4.6% of the market share and sold 4419 vehicles.[18]

References[edit]

  1. ^ Zaher, Shadwa. "Automotive industry in Egypt". Cite journal requires |journal= (help)
  2. ^ a b c d e f "Comeback car". Al Ahram Weekly. Retrieved 2019-05-12.
  3. ^ "Chevrolet Media - Egypt - Company Information". media.gm.com. Retrieved 2019-05-12.
  4. ^ a b Zaher, Shadwa. "Automotive industry in Egypt". Cite journal requires |journal= (help)
  5. ^ a b "2010 Statistics | OICA". www.oica.net. Retrieved 2019-05-12.
  6. ^ "Egypt Uprising of 2011". Encyclopedia Britannica. Retrieved 2019-06-07.
  7. ^ a b c "Signing into eresources, The University of Sydney Library". login.ezproxy1.library.usyd.edu.au. Retrieved 2019-05-12.
  8. ^ "Signing into eresources, The University of Sydney Library". login.ezproxy1.library.usyd.edu.au. Retrieved 2019-05-12.
  9. ^ a b c "2011 statistics | OICA". www.oica.net. Retrieved 2019-05-12.
  10. ^ a b "2017 Statistics | OICA". www.oica.net. Retrieved 2019-05-12.
  11. ^ "Automotive - Car-Manufacturer". www.egypt-business.com. Retrieved 2019-05-12.
  12. ^ a b c d e f g h i j k "Egypt's domestic automotive industry shows promise". Oxford Business Group. 2016-01-27. Retrieved 2019-05-12.
  13. ^ "Company Overview | Mercedes-Benz Dubai". mercedesbenzme.com. Retrieved 2019-06-07.
  14. ^ a b c d e "2019 Future of Egypt Automobile Market - Trends, Outlook and Growth Opportunities - ResearchAndMarkets.com". www.businesswire.com. 2019-02-08. Retrieved 2019-06-07.
  15. ^ "2002 Statistics | OICA". www.oica.net. Retrieved 2019-05-12.
  16. ^ "Egyptian auto market to keep growth rate at around 40%". EgyptToday. Retrieved 2019-06-07.
  17. ^ a b "Sales Statistics | OICA". www.oica.net. Retrieved 2019-05-12.
  18. ^ a b c d e "Chevrolet remains top-selling brand with 22.3% of market". www.egypt-business.com (in German). Retrieved 2019-05-12.