Egypt’s car sales increased to 13,873 units in January 2020, compared to 11,467 units in January 2019, a growth of 20.98%, according to the Automotive Market Information Council (AMIC).
It can be seen as a good year start for the car market similar to the previous year, supported by price cuts that affected all brands.
The beginning of 2019 witnessed the full application of the EU-Egypt Association Agreement which removed tariffs on European origin cars so their price declined. A similar scenario occurred this year, as car prices fell due to the depreciation of the US dollar against the local currency and the full application of the Egypt-Turkey Free Trade Agreement which stated that tariffs between the two countries will be phased out to zero by 2020. This situation affected the prices of all cars, not only Turkish origin brands.
Sales of passenger car increased by 10% to 8,747 units in January 2020, compared to 7,947 units in comparison with the same period year before. Bus sales jumped 180.6% to 2,598 units, compared to 926 units, while truck sales fell 2.5% to 2,258 units, compared to 2,594 units in the comparison period.
Imported cars continued to account for the majority of sales in the local market, amounting to 7,237 units, up from 5,909 units, a 22.5% year-over-year increase. As for the locally assembled models, they saw 6,636 sales, up 19.4% from January 2019, which recorded 5,558 units.
Chevrolet topped the best-selling brands in Egypt last month by 2,763 units and 20% market share, followed by Toyota by 2,065 units and 15% market share. Hyundai ranked third by 1,397 units and 10% market share, followed by Nissan by 1,232 units and 9% market share (down from 1,249 units in January 2019). Fiat ranked fifth by 1,032 units and 7% market share, followed by Renault by 1,000 units and 7% market share, and then King Long in seventh place by 666 units and 5% market share.
Kia ranked eighth by 620 units and 4% market share (down from 705 units in January 2019), Chery in ninth place by 591 units and 4% market share, BYD in tenth place by 522 units and 4% market share, Golden Dragon in eleventh position by 400 units and 3% market share, and Peugeot in twelfth place by 247 units and 2% market share (down from 664 units in January 2019). Finally, Citroen tailed the list by 201 units and a market share of 1%. Other brands recorded total sales of 1,137 units with a market share of 8%.
Sales of imported passenger cars increased by 13.6% to 5,765 units in January 2020, compared to 5,074 units in January 2019, while the sales of locally assembled cars increased by 3.8% to 2,982 units, compared to 2,873 units.
European brands dominated passenger car sales by 2,723 units, an increase of 40.4%, followed by Japanese origin sales, which rose by 9.7% to 2,272 cars. Chinese car sales reached 1,218 units, up 52.1%, while American cars tailed the sales after registering 25.2% drop, selling only 535 cars.
It seems that Turkish-origin cars have realised the positive impact after removing customs duties, as they witnessed sales boom in January, in which Toyota achieved 1,300 sales, compared to 709 cars in January 2019, an increase of 83.4%, while Fiat’s sales jumped to 1,018 cars, compared to 266 cars, an increase of 282.7%.
Alaa Al-Sabaa, a member of the Automobile Division at the Egyptian Federation of Chambers of Commerce, said the car market began to return to normal after the confusion that hit the market due to previous boycott campaigns stemmed from consumers’ dissatisfaction with car prices, so the market saw recession in the last period.
Al-Sabaa expected an increase in car sales by 20% in the coming period, but remained cautious due to the coronavirus outbreak which led to the disruption of production lines and freight operations in many countries of the world.
However, the stability of the local market will lead to an increase in sales ranging between 10-15% by the year end.
Moreover, Montaser Zeitoun, a member of the Automobile Dealers Association, attributed the increase in car sales to the growing purchasing power supported by the Central Bank of Egypt’s decision to raise debt-to-income rate for consumer loans to 50% and the appreciation of the Egyptian pound against the US dollar. Car companies’ tendency to change their pricing policy in 2020 following customs exemption on Turkish cars also contributed to the sales rise.
He expected more car sales jumps starting April, as the first quarter usually saw low sales, while the real car season begins in the spring and extends until September.
Zeitoun ruled out new price cuts in the coming period, especially with the slight rise in the value of the US dollar last week, stressing that with the continued rise in the value of the dollar, car prices will rise accordingly.
He denied the emergence of negative effects caused by the coronavirus (COVID-19) outbreak on car sales in Egypt, as car imports will not be affected, especially after many car companies around the world announced the reopening of their activities in China, including the factories located in Wuhan, which generated the epidemic.