The automotive industry in Egypt has been developing for 50 years. It can sell more than 200,000 vehicles annually and is now the second-largest market in Africa and the 42nd-largest globally, with an annual production output of over 70,000 vehicles. After experiencing many failures and successes, the Egyptian Automotive industry focuses more on assembly operations than manufacturing.

Evolution of the automotive industry

The 1960s

The automotive industry in Egypt started in 1961 when the Egyptian government founded the first automobile company called EI Nasr Automotive Manufacturing Company. It was the first Arab vehicle manufacturer, and it was state-owned. The company mainly produced Fiat-based vehicles due to engineering and design problems and assembled licensed foreign cars under its brand. After years of development, they developed their products, such as Nasr 128 GLS, the best-selling model.

The Open-Door Policy

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

January 25 revolution

In 2010, vehicle production increased to 116,683 in Egypt’s automotive industry. It was the best time for the Egyptian automotive sector. However, the Egyptian Revolution of 2011, also known as the January 25 revolution, deposed former president Hosni Mubarak and caused significant harm to the industry. Nissan suspended its production in Egypt for safety reasons after the government protests started; Toyota stopped its SUV assembly business in Egypt due to the situation.

Due to the nationwide protests, many Korean companies such as Samsung, LG, and Hyundai Motors had to give up their business in Egypt. Many employees were forced to return to Korea or a different country. BMW returned German nationals to Germany because of the violent demonstrations and other automotive manufacturers like Daimler AG and General Motors temporarily suspended operations in Egypt. Due to the political changes, the production rate decreased by 30% in 2011 and remained down for the next few years. The total car production, as of 2017, is only 36,640.

Domestic automotive industry

The automotive industry in Egypt is one of the most important industries in Egypt and brings many economic benefits. 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. Giants like GM, BMW, Hyundai, Toyota and Nissan produce their main product lines in Egypt’s factories. More than 15 car assembly factories and 75 facilities in the country provide more than 75,000 job opportunities. It can produce 300,000 passenger cars, light commercial vehicles, trucks, and buses annually. It is an under-penetrated automobile market with large numbers of young people. The demand is increasing every year and has enormous potential. Only an average of 35 Egyptians own a car, 1000. The number in Algeria is 130 out of 1000, four times larger than in Egypt.

However, the Egyptian pound hurts imports of car parts due to its weakening. It made the assembly parts more expensive and had a substantial effect on the vehicles’ selling price and the cost of production subsequently. It is difficult for domestic producers to compete with European exporters and large-scale Asian due to the small market. In the end, the existing assemblers will look for companies with high sales volume in the country.

The economy of Africa is increasing, and car demand is booming across the board. The Egyptian government has signed the Tripartite Free Trade Agreement, which allows free trade in 26 countries of the Common Market for Eastern and Southern Africa(COMESA). It provides opportunities for Egyptian exports.

Car manufacturers in Egypt

Al Fotouh Car Assembly Company

Arab American Vehicles

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

El-Tramco

General Motors Egypt SAE

General Motors Egypt SAE is a joint venture between world leader General Motors International and the local importer and car dealer Al-Mansour Automotive Company. The factory is located on October 6 in the city of October.

Ghabbour Group

Founded in 1940, the Ghabbour Group is Egypt’s largest car manufacturer, producing 150,000 units annually. The company manufactures cars for Bajaj Auto, Hyundai and Volvo.

JAC Motor

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

Mercedes Egypt

Established as a wholly-owned subsidiary of Daimler AG in December 1999. Assembling the Mercedes Benz vehicles.

Suzuki Egypt

Assembles for Suzuki passenger vehicles.

The Suzuki 800

Wagih Abaza Company

Assembling for the Peugeot 405.

The Bavarian Auto Group

Manufactures and sells BMW vehicles. It was founded by BMW in March 2003 and is located in October 6 City.

Speranza Motors, Ltd

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

The Seoudi Group

An Egyptian automobile manufacturer was founded in 1975. The company manufactures Nissan Vehicles in the Thai Trade Center.

Egyptian German Automotive Company

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

El Nasr Automotive Manufacturing Company

It was the first Arab vehicle manufacturer, and it was state-owned. The company mainly produced Fiat-based vehicles due to engineering and design problems and assembled licensed foreign cars under its brand.

MCV Bus and Coach

A bus bodies manufacturer founded in 2002.

Egy-Tech Engineering

A three-wheeled vehicle manufacturer.

Manufacturing Commercial Vehicles

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

Gorika Egypt

Egypt automobile market

The Egyptian automotive market now focuses on the customer experience and provides many opportunities for some parts. The geographical diversification model is one of the essential strategies for automobile manufacturers to stay competitive and profitable. All the giant companies in Egypt are focusing on auto-drive technology. The government encourages the development of the automobile industry. However, it is expensive to invest in environmental pollution regulation.

Production

As a country with a population of 100 million, the production averages less than 10,000 per year and cannot keep up with the demand. The output in South Africa is ten times larger than that of Egypt’s automotive industry, and Morocco’s production is five times larger than Egypt’s. In 2002, the total number of cars produced in Egypt was 45,073. In 2010, the number increased to 116,683, the best time in Egypt’s automobile industry. However, due to the political changes(January 25 revolution), production decreased 30% in 2011. And total output in 2017 was only 36,640. However, the government has strong confidence in boosting the car industry in 2018. The market has given its feedback that the production of the total number of vehicles went up by 90%.

Automotive sales

Sales in the Egyptian market increased by 40% in the first half of 2018 compared to the first half of 2017. The best-selling year of Egypt’s automobile industry was in 2015, when 349,100 new vehicles were sold. The total sales number in 2005 was 121,437, the worst-selling year. Compare this to the other two African countries (South Africa and Morocco). Egypt came in second place in the selling market, only behind South Africa, followed by Morocco, and the sales market can still grow due to its large population.

In 2017, Chevrolet was the best-selling brand in Egypt, accounting for 22.3% of the automobile market. Chevrolet sold 21,468 cars, a 34.7% decrease compared to 2016, when it sold 32,890 cars. 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. Hyundai won third place with 14.1% of total marketing sales and sold 13,613 vehicles. Toyota came next, selling 7,930 cars and winning 8.2% of the market share. Mitsubishi was in fifth place with 5% of total sales during 2017 and sold 4804 vehicles. Chery came in the sixth position with 4.6% of the market share and sold 4419 cars.