In the past few days, a number of distributors and traders have expected the automotive market to drop temporarily in July and until the end of August. Despite waiting for distributors and traders to lower the prices of delivery cars, a number of companies have increased their prices by more than 8% compared to the beginning of July.
The most prominent of those companies were Opel, Hyundai, Toyota, Chevrolet, Mercedes, BMW, Nissan, and Kia. Increases ranged from EGP 2,000 to EGP 90,000 depending on the model.
Opel increased the price of the Astra by EGP 5,000 to reach EGP 325,000, and increased the Corsa by EGP 5,000 to EGP 265,000. The company also added EGP 9,000 to the Insignia, Cascada, Adam, and Mokka, and EGP 19,000 to the Mireva to reach EGP 319,000.
Hyundai raised the price of its Tucson during the middle of the month to EGP 5,000 to start from EGP 450,000.
The company has already altered the price of its models at the beginning of July in increments ranging between EGP 1,000 and EGP 3,500, adding EGP 1,600 to the Verna, EGP 1,900 to the i10 to reach EGP 180,900, and EGP 2,000 on the price of Grand i10 to reach EGP 230,000
Hyundai also raised the price of the Elantra HD by EGP 2,000 so that the price of the car now starts at EGP 225,000. The company also increased the price of the Elantra AD by EGP 3,000 to start from EGP 323,000.
The price of the Tucson was previously reduced at the beginning of the month by about EGP 60,000 to start from 445,000.
The Japanese brand Toyota added EGP 12,000 to the Corolla to start from EGP 347,000; 5,000 to the Yaris to now start from EGP 295,000; EGP 35,000 on the Auris to start from EGP 390,000, and EGP 12,000 on the CH-R model.
Toyota has maintained its car prices during May and June upon its deliveries and has continued to stabilise prices at the beginning of July.
Chevrolet has raised the price of its cars during July ranging between EGP 2,500 and EGP 9,000 depending on the model. An amount of EGP 4,250 was added to the price of Aveo to start from EGP 187,800, and EGP 5,000 on the price of the Optra to start from EGP 205,000. The company also added an amount of EGP 3,000 to mark an amount of EGP 158,400, and EGP 9,000 to the Cruze to reach EGP 279,000.
Chevrolet has fixed the price of its models at the beginning of July, apart from lowering the price of its Cruze by EGP 30,000 so that the new price tag of the car now starts at EGP 270,000.
Mercedes-Benz varied its increase between EGP 5,000 and EGP 30,000. The company added EGP 5,000 to the C180, EGP 30,000 to the CLA180, and EGP 10,000 to the E180.
The German brand has already maintained the price of its models that were in June to continue in early July.
The German brand BMW raised the price of the 320 by EGP 20,000 to record EGP 740,000, and added EGP 90,000 to the price of the X3 and EGP 40,000 to the price of X5.
BMW has already kept the prices at the beginning of July to be the same as those of June, before raising them during the middle of the month.
Nissan has reviewed the price of its models during July by raising the price of the Sunny by EGP 2,500 to start from EGP 200,000—where the highest trim of the model has a price tag of EGP 220,500. The giant Japanese firm added EGP 3,000 to the price of the Sentra to reach EGP 291,000, and EGP 5,000 to the Qashqai.
In the past month, Nissan added EGP 2,000 to all its Sunny models to start at EGP 198,000 and up to EGP 218,000, while the price of Sentra rose EGP 11,000 to reach EGP 288,000.
Kia added EGP 4,000 to Carens, Cerato, and Sol, and EGP 5,000 to the Cee’d to start from EGP 365,000 and EGP 3,000 to the Rio to record EGP 318,000, and EGP 2,000 to the Picanto to be now priced at EGP 232,000.
For the first time in a year and a half, the prices of Kia have remained the same as those in May, June, and July.
Meanwhile, according to the member of the General Automobile Division of the Federation of Chambers of Commerce (FEDCOC), Alaa El Sabaa, any offer from automotive companies to reduce prices is considered a real opportunity for buyers. “Customers should take advantage of the offers, as it is an opportunity that will not be repeated,” said El Sabaa.
He added that prices are expected to rise again after the end of August, explaining that the market is affected by the decisions of the dollar exchange rate and interest rates.
He pointed out that car sales fell by 45% during the first five months of 2017, with 46,000 cars, compared to the same period of 2016, which saw the sale of 85,500 units.
A prominent source in the automotive sector, who preferred to remain anonymous, told Daily News Egypt that distributors, traders, and companies are currently selling out-of-stock accumulated units during the past few months because of the decline in sales during the past four months. The pricing is currently based on an estimate of the cost of imports in the upcoming period after a disposal of the stock.
The source predicted that car prices will witness a stronger rise in the upcoming months as companies will have to start importing 2018 car models. This will push companies to announce prices that will be the highest in the sector’s history and will intensify the recession.
He also pointed out that companies will go to offer discounts during the second half of this year to eliminate the inventory of cars accumulated during 2016 and 2017, while working to compensate for the decline in the profit margin in these models by raising the prices of new 2018 models 2018.
It is likely that the market sales will fall significantly by the end of this year to close to 40%, compared to what the public market achieved.
Khalid Saad, a member of the board of directors of the Bavarian Automotive Group and general manager of Brilliance Egypt, said that sales of the market witnessed a 45% decline during the first five months of 2017 compared to the corresponding period of 2016, due to consumers abstaining from buying after the recent wave of price hikes, which continued during the first four months.
He expected the market to close sales this year, with a decline ranging between 40% and 50%. He added that the increase in the dollar exchange rate is causing the sector to fall in a state of stagnation, which, as a result, led to the increase in car prices.