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AMIC, EAMA, EAC to form committee to follow up on Egypt Automotive’s recommendations - Daily News Egypt

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AMIC, EAMA, EAC to form committee to follow up on Egypt Automotive’s recommendations

Among the most prominent recommendations was the need to attract new investments to the manufacturing sector and feeder industries.

The Automotive Marketing Information Council (AMIC), Egyptian Automobile Manufacturers Association (EAMA), and Egyptian Automotive Council (EAC) will form a committee in cooperation with Business News to follow up on the recommendations of the second annual Egypt Automotive, which concluded on 8 December.

EAMA Chairman Hassan Soliman, AMIC Director Mustafa Hussein, and EAC Founder Farid El-Tobgy told Daily News Egypt they will all communicate with the government to follow up on the recommendations.

The second annual summit was organised by Business News under the auspices of Minister of Industry and Trade Tarek Qabil and Minister of Investment Ashraf Salman. The summit was entitled “The future of investment in the automotive sector”.

A number of government agencies, automotive manufacturers and assemblers, and feeder industry companies participated in the event.

Among the most prominent recommendations was the need to attract new investments to the manufacturing sector and feeder industries.

It was also recommended to work on increasing exports and minimising imports by increasing the volume of production in local factories, working on the development of feeder industries, increasing the size of their production, and improving their efficiency.

The automotive sector called on the government to quickly issue the automotive industry strategy and to discuss it with the sector before approving it. The sector also called for the exploitation of the Suez Canal Area Development Project by establishing an area for storage and building factories to assemble the automotive industry inputs, to increase exports.

The recommendations also included clear mechanism to secure hard currency, reconsidering dollar priorities for each sector, and developing a replacement and renewal plan for old cars in cooperation with international companies.

Chairman of Business News Mustafa Sakr asked Qabil to follow up on the summit’s recommendations to achieve a breakthrough within the automotive industry. Qabil previously said the automotive industry strategy will be launched soon, with the aim to produce 1m vehicles in Egypt by 2025.

Qabil said the strategy will include a number of agents who will be allocated certain exporting rates to achieve and reach a faster growth for the sector. The strategy aims to deal with challenges the sector faces, in addition to attracting full manufacturing operations, including a number of legislations and arrangements that will be reviewed by the upcoming parliament for approval.

Qabil said the launch of the strategy will coincide with the development of the Suez Canal Project and exploit trade agreements signed by Egypt, signalling the possible expansion of the COMESA region, and increasing exports to Arab and African markets.

He said the industry is facing many challenges arising from the market liberalisation of imports from the EU in 2019, which will lower protective measures for Egyptian products.

“The sector has not fully exploited the protection provided by the state,” he said, noting that feeder industries should have supported the domestic market at better rates, whereby about $500m worth of feeders outputs are exported every year. “The Egyptian economy is ready to lead the automotive industry, but state protection cannot last forever.”

The economic situation is witnessing a remarkable growth, whereby the private sector accounts for about 70% of the total production and is expected to grow to 95%, according to the minister.

There are three main challenges that hinder the growth of the economy; the budget deficit, attracting new investment, and bridging the trade deficit by increasing exports and cutting down on imports.

“The Egyptian automotive sector is one of the most important industries in Egypt,” Qabil said. “Some 300,000 vehicles are sold per year.”

There are 27 automotive production lines owned by eight companies, and the sector employs over 200,000 workers and utilises about 80 feeder companies, with total growth of 15% per year for the sector.

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