Kia, Renault agent looking into car assembly plants in Egypt: Youssef

Lack of currency availability led to increased car prices in parallel market, says EIM automotive sector chairman

EIM group is an agent covering a group of companies in different fields and business activities, most prominently South Korea's Kia brand and France's Renault. Renault is frequently the most sold car in Egypt.
In an interview with Daily News Egypt, Khaled Youssef, Head of Automotive Department at the group, talked about the challenges facing Egypt's car market. He also outlined plans on how to get out of the current crisis, as well as the future of the company in the local market.
You are the chairman of two entirely different agencies, one is Korean and the other is French. How do you deal with managing the agencies?
They are, in fact, two completely separate companies, connected only by senior management, which I lead, and this led to the creation of a kind of competition between the two companies.
Let's begin with Kia – what is its situation in the Egyptian market?
We obtained Kia's proxy almost seven years ago, and during this period we faced many difficulties, but we were able to overcome them and returned the agency to its natural position among the five most sold cars in the Egyptian market.
Kia introduced a new car this year, the Cee'd. How do you view its performance? Did it achieve what was planned?
This car has achieved a breakthrough in the market. Customers have waited for a very long time, especially after the great successes achieved by this car in Europe, and the same success happened when we presented the car locally in March of this year.
Cee'd has a station wagon model, but the local market does not prefer this kind of car. Do you regret presenting the Cee'd station wagon?
The market really does not favour station wagons. There were many experiments that did not succeed, but the Cee'd station wagon succeeded in achieving high sales, and managed to obtain a place in the Egyptian automotive market.
What do you think is the reason for the success of the Cee'd station wagon model?
The main factor for the car's success is its potential. The car has many outstanding interior potentials, and its price is also distinctive. This led to a great demand for it.
What are the new items Kia plans to present during the upcoming period?
We have many new models that we will present in the upcoming period, and they are expected to achieve very high sales in the market.
Do you intend to engage in the field of car assembly?
Yes, we are currently studying entering the car assembly field in Egypt, and also studying providing more than one model of Kia locally during the upcoming period. The same also goes for Renault models in the local market, as this will officially be announced in the first quarter (Q1) of next year.
Do you plan to buy one of the existing factories or enter into a partnership?
I cannot answer this question. All we currently have is many offers to assemble Kia and Renault products. It is not clear whether we will buy our own factory or do the assembly process in an existing factory.
What is the reason behind your interest in car assembly?
Removing customs on European products because of the European partnership agreement is one of the main reasons behind this decision. The competition after customs removal will be almost settled in favour of European products, and this is what led us to be present in the car assembly field, in order to be able to compete and utilise all the concessions of assembling parts in Egypt.
What about Renault's performance in Egypt?
Renault now occupies first place in European car sales without competition, due to the confidence of the client in after-sales services and the product's quality, in addition to the efficiency and the very competitive prices.
What is new for Renault in the upcoming period?
We plan to provide more than one new model during the upcoming period. I believe that Renault will occupy first place in the automotive sales sector over the next few years.
What are the most prominent obstacles currently present in the local market?
The main obstacle is the lack of foreign currency, especially the dollar, which stands in the way of any increase in the size of investments in Egypt and an increase in the number of cars.
All your products are sold at very high prices. How do you justify this? Are you behind this increase?
Due to the unavailability of foreign currency, the volume of demand is always larger than the volume of supply, and this creates long waiting lists, and opens the way for retailers to raise prices for immediate receipt. This method is subject to the process of supply and demand and we, as a company, cannot interfere in this matter. Selling through the company is with the official announced price only. In case the car is not available, we open the door for reservations, and this is very normal.