The Egyptian Automotive Dealers Association has launched an initiative that seeks to halt potential layoffs, preserve employee rights, and continue selling cars following the Central Bank of Egypt’s (CBE) decision to float the Egyptian pound. Daily News Egypt sat down with the association’s chairperson, Osama Aboul Maged, to discuss the initiative and the fallout from the flotation decision.
Why did you launch this initiative?
The initiative is the association’s contribution towards preserving the stability of the auto sector in light of its unstable situation. It aims to prevent any layoffs in the sector, as the association pledges to pay employee salaries in case dealers are unable to pay their dues.
How would the association secure the necessary funds for the initiative?
The association seeks to establish a shareholder fund, after receiving all the dealers’ requests and calculating the number of employees.
How will the association deal with dealers who violate the initiative while it has no authority over them?
The initiative is a warning against halting sales in a bid to save what can be saved. We may not have the executive power to execute the initiative as a set of rules, but there is a code of honour agreed upon by all members. This code stipulates that all members should follow the decisions reached by the association. It means that all members will be against any violations.
The association derives its authority from its members, whose power is equal to an executive authority. This means that the majority of the members will follow the association’s decisions.
How will the association confront the problems dealers are grappling with?
The association is keen to maintain the stability of the sector and find solutions to the problems dealers are facing through a legal committee and a dispute resolution commission.
The association provides a legal umbrella that represents all dealers before the state, as the legal affairs committee is responsible for defending any member of the association before the executive authorities, in case he encounters any obstacles in his work.
The association’s dispute resolution commission, consisting of major dealers, is responsible for solving dealers’ problems across all provinces.
The automotive sector has recently witnessed monopolistic activities. How do you plan on facing this?
The association will deal with any monopolistic practices or manipulation of prices. According to the association’s code of honour, we will boycott any dealer found to be involved in any illegal act
What are the most prominent files that the association is focusing on in the coming period?
The association is focused on implementing some files, such as allowing showrooms to rent space on the pavements from the governorate, so the entry and exit of cars will be easy.
The association is on its way towards reaching a final agreement with Cairo governorate. The governorate demanded EGP 50 per car displayed on the pavement, but the association offered EGP 20. This is still being negotiated.
The association is working on establishing an automotive city that includes a unit for licences, branches of banks for facilitating customer purchases, along with many brands on display in exhibitions to protect the customer from exploitation or opportunism.
Are there other plans in the works for developing the sector other than the automotive city?
The association seeks to attract manufacturers to work on implementing an Egyptian car made up of 40% local components, as well as assembling all cars in Egypt. It is not difficult to manufacture a car, but if we don’t know how we can seek help from experts to implement this on Egyptian soil.
What is your evaluation of the CBE’s decision to float the Egyptian pound?
The CBE’s decision to liberate the pound’s price and leave it up to supply and demand in the market supports the Egyptian economy after successive crises. The decision also works towards eliminating the gap between the price of the currency in banks and the unofficial market.
I won’t hide my concerns about the impact of liberating the pound’s exchange rate on the automotive sector, which will increase the prices of cars, despite there already being price hikes in recent days.
I have these concerns as a result of the increase on the customs on cars.
Why does the association insist on suspending imports, especially after liberating the pound’s exchange rate?
The association’s decision related to the suspension of imports continues until the end of November in order to support the economy. This decision came during a meeting with top importers before the CBE’s decision.