The automotive market suffers the consequences of political and economic instability, reports Ahmed Kotb Ahmed Samir, aged 24, works as an auditor. He has been saving for two years to save up for a car downpayment. But now that he has the money, he has decided to delay his purchase. "It is risky for me to buy a new car right now," said Samir. The reason why he's worried is he is unsure how long he can keep his job. Samir is not alone. Like many others, he fears his company might start laying off workers, due to financial difficulties. "I need my salary to cover the monthly instalments of any car I decide to buy," he said. "It would be catastrophic if I find myself jobless with a due monthly instalment." But potential joblessness is not the only reason why customers are holding back. According to Effat Abdel-Aati, head of the cars division at the Cairo Chamber of Commerce, insecurity leading to repeated car theft is also causing people to hold back from investing in new vehicles. About 15,000 cars were reported stolen in 2011, compared to 4,000 in 2010. Abdel-Aati added that cars imported from the European Union are now more expensive, despite a 10 per cent reduction on customs duties on these cars every January starting 2010. The reduction is a result of an Egyptian-European agreement that stipulates a gradual decrease until 2019, when duties will reach zero level. But "the euro now costs more," he explained. Political instability, Abdel-Aati added, greatly hinders the car market because customers fear uncertainties that might lead to a deteriorating economic situation. "Politics and economics are intertwined," he noted. Moreover, he added, the first couple of months in the year are usually poor in terms of sales. Samir and others' decision to delay their purchases has meant that car sales have suffered huge losses since the 25 January Revolution. Ahmed El-Deeb, branches general manager at Al-Masriya, one of the country's largest passenger vehicles distributors, told Al-Ahram Weekly that the number of cars being sold is still far beneath pre-revolution figures. "We used to distribute about 3,000 cars per month, but we now sell approximately 2,000," he said. Still Abdel-Aati is optimistic. "I believe that if the presidential elections are held without any turbulence and security is fully restored, the car market will boom by at least 50 per cent before the end of the year, and everything will be back to normal," he said. Figures show that car sales have improved in comparison to last year. According to Khaled Hosni, spokesperson for the Automotive Marketing Information Council (AMIC), the number of passenger cars sold in January and February this year has risen by 33 per cent, as compared to the same period last year. "About 18,700 cars were sold in the first two months of this year, compared to an estimated 14,000 cars sold last year," he said. And despite the tough year that Egypt went through in 2011 amid expectations of drastic losses to the car market, sales figures were satisfying, with only a 30 per cent decline. More than 176,000 passenger cars were sold last year. Still, although these figures give hope to many car manufacturers and distributors, they are still far from normal. To try and bring sales levels back to normal, multiple efforts have been made to try and bring customers back to showrooms. One of these attempts was Formula Al-Ahram, one of the largest automotive exhibitions in the Middle East and North Africa, and the only motor show in the region that is approved by the International Organisation of Motor Vehicle Manufacturers. This year's Formula Al-Ahram, which ended last week, was considered by many participants as a good opportunity to restore normal sales figures. As well as new car models displayed for the first time, banks were present during the exhibition to provide customers with payment facilities on car loans. But the banks did not make special offers, as they had done during previous shows. According to Sherif Alaa, deputy manager of the department of car loans at Baraka Bank, there is no need for special offers because there are already a number of payment facilities on offer to all customers. It is the customers, Alaa said, who are opting to stay away.
