BREAKING: Egypt's central bank dismisses CIB head Hisham Ezz El-Arab over 'serious violations'    Heavy rain, lightning and thunder hit parts of Egypt Thursday    Egyptian authorities foil attempt to smuggle three artefacts from Alexandria port    New fighting in Nagorno-Karabakh dims hopes before Washington talks    Egypt's health minister calls for adherence to Covid-19 measures in anticipation of rise in infections    Egypt drop one spot in FIFA's October rankings    Liverpool's Klopp pleased with Fabinho's display in defence    Social media must do more to combat online abuse, says Sterling    Egypt reports 178 new coronavirus cases, 13 fatalities on Wednesday    Lebanon's Hezbollah says does not nominate anyone for PM    In Photos: Visitors observe biannual sun alignment at Ramses II Temple in Abu Simbel    Lebanon begins consultations to pick new prime minister    'EU wants successful outcomes' of GERD negotiations: European ambassador to Egypt    Release of trailer for film Mafkoud: On the fate of those who went missing during the Lebanese civil war    Candidates poised for election marathon    Surviving the economic damage    Egypt's Sisi attends graduation ceremony of armed forces cadets at the Military Academy    Egypt's Mahmoud Mohiedin elected as IMF executive director, board member    Egyptian insurance companies' premiums 9.6% up in five months    Egypt's President Sisi names new head of anti-corruption watchdog    Egypt's c.bank offers 18 bln pounds T-bills on Sunday    EgyptAir offering discounts for some international flights    Egypt records 212 new coronavirus cases, 14 deaths on Saturday    Egypt to require PCR coronavirus tests for airport travelers    Egypt sends 125 tonnes of glass by sea to Beirut    Legend Messi officially wants to leave Barcelona, hands transfer request    Global smartphone sales drop 20% in Q2, yet Apple's iPhone sales steady    Sisi: Egypt keen on establishing development projects with Iraq, Jordan    Egyptian megastar Amr Diab releases new hit music video    Making of Harry Potter will be available for fans at new park in Tokyo    Egypt's Senate elections official results to be announced Wednesday    Netflix Egypt is bringing megastar Amr Diab back with a new original    Egypt reopens Rafah border crossing for first time since April    Egypt's senate elections 2020 trending on social media in few days    African Champions League final will be played on Oct. 16-17, CAF says    No room to delay Egyptian Premier League games – EFA's board member    The Facebook Preacher's Search for Fame, and Egypt's Economy    Egypt calls on UNSC to address oil spill risks off Yemen coast    Egypt economically strong in face of COVID-19, reforms ongoing: International Cooperation Minister    Arafa Holding reports $144,000 COVID-19-related losses in April    Egypt's efforts in Libya to activate free will of Libyan people: Al-Sisi    Hyksos campaigns were internal takeover, not foreign invaders: study    COVID-19 affects Egypt sporting clubs    COVID-19 will soon turn to seasonal like swine flu: Presidential Health Advisor    ‘Egypt's Support' coalition convenes to discuss its Senate election list    Robbery attempt leads to discovery of Ptolemaic monuments in Qena    Flouting international guidance, Ethiopia unilaterally starts filling its Nile dam    Zaha speaks out after online racial abuse    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.





Egypt needs a new production strategy to keep up with international auto industry
Published in Daily News Egypt on 26 - 02 - 2020

Khaled Saad, Secretary General of the Egyptian Association of Automobile Manufacturers, stressed the need to start localising the auto industry to keep pace with the international auto industry, stressing the need to set broad terms that will usher the country into a robust auto industry, rather than just an assembly hub.
Saad said there is a need to encourage small and large factories alike in order to promote a synergy that could cover the state's target production volume, calling for grants and manufacturing incentives for companies and investors.
Currently, about 30% of manufactured cars are made from local components, especially since local car factories aren't producing more than 80,000 cars annually, which is about 40% of the Egyptian auto market.
Saad denounced the ability of increasing each factory's production volume to 70,000 cars annually, seeing that the Egyptian market would not be able to absorb that many cars. Not to mention that there are only 19 auto companies operating in Egypt.
There is a condition of quantitative production for the local market to export at 25%, but there must be incentives for it, meaning that investors, at the moment, don't have good enough incentives to export or a market size that accommodates this amount of cars. It is difficult to export cars at a price more expensive than those imported.
The imported components are exempted from customs taxes similar to cars imported from Europe and Turkey, since it is not normal for taxes to be collected from the factory in the initial stages of production. Saad suggests that they be collected after manufacture and sold to ensure the capital cycle, which in turn will increase the proportions of local components.
For his part, Amr Suleiman, chairperson of Al-Amal Automotive Trading and Assembly Company, stressed the necessity of setting a clear strategy for auto industries in Egypt.
Suleiman explained that the government needs to offer more incentives needed by local manufacturing companies, along with abolishing customs on imported components used by local industries. Already, these customs represent an obstacle due to the large price tag on locally produced cars.
The deepening of the local industry is only possible through increased car production, and better local industry and more incentives will attract new investments.
Suleiman suggests replacing cars that are over 20 years old and to stop licensing them in order to provide opportunities for production, employment, and investment allocation.
The old strategy of the car industry, which was canceled or discontinued, received many objections due to the difficulty of implementing it on the ground. The old strategy was based on the ratio of the local component increasing from 45% to 60% within 8 years, as well as exporting 25% of production, in addition to the annual 60,000 unit production volume.
The Egyptian government's requirement of 60,000 cars from each auto factory seems a bit far-fetched seeing that Egypt's current combined total production capability sits at about 80,000 cars annually.
He pointed out that local component can reach only 50% in the new strategy, and it is impossible to reach 60%, as mentioned in the old strategy.


Clic here to read the story from its source.