GB Auto aims to sell 6,000 Geely cars during the second half (H2) of 2015, after successful tests in German factories were conducted on the quality of the car amidst a negative campaign against the car in social media. Chairman and CEO of GB Auto, Raouf Ghabbour, said the company has conducted tests on the car at German factories, which confirmed the quality of the car. He added in the financial report that the company sold 3,500 cars within two months, and it aims to sell 6,000 Geely cars during H2 of 2015, with 1,000 cars per month. Ghabbour indicated that there is a growing domestic demand for passenger cars, which represent 53% of sales in the second quarter (Q2), in light of the growth of Hyundai sales by 22.5% in the Q2, and by 38.2% in the H1. This encouraged GB Auto to offer new models in 2016. He also explained that Mazda sales witnessed a growth in revenues, reflected in their contributions to the gross profit. The company looks forward to developing Mazda's sales performance. He stressed that the company plans to receive 4,000 vehicles, instead of 3,000, to take advantage of the growing demand. Regarding the effects of the low exchange rate of the pound, Ghabbour noted the company will work on increasing prices during Q3 of 2015 due to their inability to fully benefit from the impact of the currency devaluation against the dollar. He added that this situation pressured GB Auto's margin profits, unlike the European and Japanese car agents that benefited from currency devaluation, as their profits improved even when their prices stabilised. Ghabbour addressed the situation in Iraq, which is one of the company's major markets, saying that there are two major factors ruling the scene now. First, the consumer trust is affected by the political, economic and security turmoil. Second, the cars' supply increased, as entities do not have legal approvals to move their stock surplus to the Iraqi market. He noted that GB Auto will continue working in Iraq to defend its market share, hoping that the market will revive in the future. On the other hand, the company was targeting the sale of 500 units in the first half for the Karry model, designed for seven passengers besides the driver. However, sales were limited to 177 units. Ghabbour explained that modifications occurred on the engine to increase it from 1 litre to 1.2 litres, in addition to adding an air conditioner to the car. As a result, the sales now amount to 150 cars monthly, and are expected to grow in the next period. Ghabbour also said the tuk-tuk factory that the company will establish will be the first assembling line for the Bajaj tuk-tuks outside India. He further noted that GB Auto believes that there are great opportunities to repeat the tuk-tuk and motorcycle experience in Iraq and other markets. Further, the chairman revealed that the company is conducting negotiations with its technological partner to establish a tyres factory, which is important for meeting local market needs in addition to meeting the high demand in North and East Africa and Gulf Cooperation Council countries, whereby imports stand as 99% of the tyres sales there. GB Auto increased its paid up capital by EGP 960m, with EGP 473m through issuing new shares, and EGP 485m through capitalising on the debts the company owes the shareholders. The total debts amount to EGP 5.05bn in the second quarter of 2015, including EGP 1.03bn to financial companies. Ghabbour said the negative impact from the lack of the dollar currency began to decrease in June. The crisis had a significant impact from February to April on the import of cars. He added that the company succeeded in relying on the strategic stock in meeting its needs during the period in which the market suffered from the lack of foreign currencies.
