The Ministry of Trade and Industry decided to postpone the application of 29 new specifications for cars and trailers until a mechanism to apply them to local and imported non-European products is decided upon.
Minister of Trade and Industry Tarek Qabil made the decision after meeting with automobile manufacturers a few days ago
A number of car companies objected to the application of new standards for the time being due to the tight deadline for automakers and workers in the field of feeder industries to modify their production lines to include new specifications.
Fiat Chrysler Automobiles objected most to the application of the specifications since it is a US company with components of US specifications that differ from the specifications set by the Egyptian Organisation for Standardisation and Quality (defined in accordance with European standards).
The companies and manufacturers of non-European cars explained the difficulty of applying those specifications quickly because the compatibility with the new requirements would require changing production lines, pumping new investments, and dealing with additional costs to the manufacturing process.
This will also reflect on import since the application will enhance the superiority of the European products over others in light of the Egyptian–European partnership agreement.
During the meeting, Qabil highlighted the government’s great attention to the encouragement and development of the automotive and feeder industries. It will also providing more incentives to deepen local manufacturing of cars and attract more international companies to work in the Egyptian market during the next phase.
The new strategy for cars, currently being discussed and prepared, is largely based on increasing production and exports and shifting from the assembly process to complete manufacturing of cars. It will also increase the proportion of local components in cars to reach 45% to 60%.
The strategy will also allow the establishment of large production units and factories and the exploitation of productivity savings for exports, especially in the automotive components sector, with components that can strongly compete in many foreign markets.
Qabil pointed out that Egyptian engineering industries have the potential and capabilities with which they can achieve success on the local and global levels. Many factories operating within this sector made great strides towards the development and ownership of technology and providing high-quality products that occupied a distinct position within many export markets.
Egypt should economically and geographically aim for major international auto companies to produce within the country,to move toward the various global markets with preferential benefits through commitment to many trade agreements such as the European Union, Africa, and the Arab countries’ markets.
Chairman of the FEI’s Chamber of Engineering Industries Hamdy Abdel Aziz confirmed that they are keen to coordinate with the ministry to support and develop the automotive industry, especially since it is one of the basic industries that provides thousands of job opportunities.
Large investments were pumped into this sector, both in the field of car assembly or the feeder industries sector, which must be maintained in the light of the major challenges in the industry.
CEO of GB Ghabbour Auto and member of the Board of Directors of the Chamber Raouf Ghabbour pointed out the importance of the Ministry of Industry’s support to the automotive industry, especially during this phase. The industry faces several challenges, the biggest being the provision of bank credits in foreign currencies to cover the needs of factories and to remain committed to its customers.
Bavarian Auto Group Chairman and member of the Board of Directors of the Chamber Farid El-Tobgy shed light on the importance of improving auto and components quality standards. It is the basis for development of this industry, not for the purpose of production to the local market only but also to access foreign markets.