By Ahmed Amer and Aisha Zidan
While participating in the event his company held to celebrate cooperation with Cisco Systems, Raouf Ghabbour, CEO of Ghabbour Auto, talked to Daily News Egypt. The event was entitled “When technology meets automotive industry”.
What are your demands regarding the strategy of automotive industry?
I demand that both the Ministries of Industry and Finance urgently create the balance between the privileges offered to Egyptian exporters, when entering the European market and the privileges offered to the European exporters when entering the Egyptian market. Egyptian exporters obtain privileges amounting to 10% customs exemption, while European car dealers benefit from exemptions reaching 135% for big cars and 40% for small cars.
Did you liaise with any governmental body in this regard?
We talked to both the Ministries of Industry and Foreign Trade and Finance. The government will take the decision that serves the Egyptian economy [best], especially in light of its concern in this period regarding domestic industry and giving it the priority over foreign industry, even if its price is higher with more than 15%. I warn against not saving the local industry from diminishing, in order to maintain imported cars. Neglecting the present industry will eliminate it, or transform it to an assembly industry instead of an industry that competes abroad and acquires the local market.
What is your comment on the absence of the automotive industry from the Economic Summit?
It is not possible for the government to change its perception towards a specific industry and propose it to investors before the presence of legislative change, which protects workers of this industry. Moreover, no investor would get involved in an industry in any country under the absence of legislations determining his rights and obligations.
Will car prices go up in the next period?
It is expected for car prices to rise next period, under the value decrease of the Egyptian pound against the US dollar. Moreover, workers in the sector cannot completely bear the increase of taxes and customs for the consumer. The tax system was in the beginning of the year while the dollar exchange rate was at EGP 7.12, but it now amounts to EGP 7.63. This must be reflected on the prices in order to reach balance in revenues for workers in the sector.
What about Mazda’s sales lately?
Since the start of the year, sales exceeded expectations and, in order to cover its sales, a service centre was established. Also the company expanded its activities to include after-sale services and it is investigating how to increase its services in the coming period.
Could you tell us about the expansion strategies?
We plan to expand in the national market in the next period. We started establishing a tyre factory and a Toktok factory, as well as a motorcycle factory. We also started building eight centres for customer service concerning passenger cars. The centres are located in Aswan, Luxor, Sohag, Minya, Beni Suef, Marsa Matruh, Sharqeya, and Damietta, aside from five new centres concerning trucks. Parallel to the national market, we are planning to expand in the UAE by establishing a branch there similar to the other international branches. Moreover, we are investigating some new agencies concerning the local market.
How far does the political situation affect national and international investments?
Egypt is a big country, so the political situation did not affect negatively the company’s investments because no matter how bad the situation is, it could not affect the needs of 90 million citizens who look for all car types, while for investors, the national market is considered a great opportunity which can include all goods in huge amounts. We are present in five Arab countries: Egypt, Jordan, Iraq, Algeria and Libya. Despite the unstable situation in Libya and Iraq, we have no intention to exit their market now for two reasons: the company’s policies are against exiting any market; the location of the company in these countries does not cause any threat against its employees. Moreover in case of emergency, the company is totally ready to relocate its employees in another country where they can connect with their old locations via technological means, like Dubai and Jordan, wherever they are.
Do you have intention to invest in reviving El-Nasr Automotive Manufacturing Company?
We do not have intentions to take part in this, and this step is not included in our strategy. If we wanted to open a new factory for automotives to expert, we would not choose El-Nasr Automotive Manufacturing Company. The best choice would be to manufacture cars inside the Suez Canal Axis area, because production in the area would be better to facilitate exports to Africa and Europe, in addition to providing the transport costs, and we would only take care of the freight costs. It is of benefit to the government to not revive El-Nasr, instead of wasting money in an attempt to re-operate it. El-Nasr is located in Wadi Hof, Helwan, on a land area of 1m sqm, and the price of land is roughly EGP 2,000 per metre.
What about the data centre in Qaliubiya? What is the aim behind it?
We are currently working to finalise the data centre in Qaliyub, which will be the same as the data centre in Cairo. The company started building the centre a year and a half ago, and work was going slow in the second half of 2014. The centre will be ready by the end of this year. The purpose of building it is that the company can cover 100% of the services in the whole country, as well as integrating with the centre in Cairo. If there was a malfunction in any of the centres, the other one would substitute it and they would work at the same time because the company offers services 24 hours, so that the customer can call at any time to reserve an appointment for their car maintenance.
How many employees are in the company?
We have 8,000 employees, and we supervise almost 15,000 workers. We have plans of expansion to double the number for the coming period.
Are there cars that connect to the Internet?
These types of cars do not exist in the Egyptian market so far, but the new Hyundai car can connect to the Internet, and the driver can use the internet to drive without any manual intervention. Two years ago, cars that connected to the Internet were not available at all, but we are getting there.