The used-car market is suffering from the fallout of the dollar crisis, which has affected the automotive sector as a whole. The automotive sector has limited importation of cars during this period, and in turn, the lack of new cars on offer has driven many car owners to delay selling their vehicles second-hand. The low supply has caused used-car prices to increase by 30% to 40% compared to last year.
Director of the second-hand car market in Nasr City Amr El-Kady told Daily News Egypt that the dollar shortage has severely impacted the used-car market. The scarcity in the supply of new cars has led many owners to hold on to their current cars and wait for the market to improve. “Used-car prices have increased by up to 30%,” El-Kady said.
Cars priced between EGP 60,000 and EGP 80,000 have the greatest demand, though most used cars are sold at more than EGP 90,000, according to El-Kady. Adding a profit margin to the cost of transportation and procedures resulted in the price increasing, which negatively affects market sales, the director said.
Ahmed El-Sayed, a car dealer in the market, said the price of the dollar against the pound has affected sales of new cars, having dropped as low as 50%, the lowest recorded in four years. He urged the government to take prompt economic reforms to help the Egyptian car market recover.
Moreover, Mahmoud Abdel Fattah, the owner of the Islamia Auto Fair Trading, said the car market is suffering from a shortfall in supply, which has boosted prices by 40%,
Abdel Fattah called on the banking sector to provide facilities and letters of credit to traders in order to help them open new markets and face the recession that has swept across the car market. He also called on the government to take action so as to adjust the replacement process, which is one of the government’s top priorities currently.
The dollar price to the pound has broken records on the informal market, approaching EGP 10 for the first time in history. The official price stands at EGP 8.95 as of Monday morning.
Traders said the exchange market has almost completely halted, amid confusion, while the Central Bank of Egypt stepped up supervision and inspection operations and even threatened to shut down dealers that offer higher prices than official ones.
According to El-Kady, most used-cars buyers look for Korean models; the Hyundai Elantra and Kia Cerato are the most popular models on the market, whereas the Hyundai Verna and Accent, and the Kia Rio recorded no sales due to their high price.
Korean models have acquired some 40% of sales operations, followed by Japanese models, with a 30% market share. The Nissan Sunny and Toyota Corolla are the two best-selling Japanese models.
Chinese cars come in third in used-car market sales, accounting for about 21% of the market sales. In the fourth spot come European cars at 9.5%, followed by US models, most notably the Chevrolet Aveo.
El-Kady explained that the sole factor governing Chinese car sales is the price, rather than the condition of the car or its model. Some used cars have seen price increases of almost 50%, such as the Skoda Octavia.
Ahmed Hussein, a dealer of second-hand cars, said his best-selling cars are models by Hyundai, Kia, and Toyota.