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Egypt’s new academic year pressures auto sales - Daily News Egypt

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Egypt’s new academic year pressures auto sales

Passenger car sales are expected to rebound by mid-December

The impact of the new academic year’s commencement in mid-October has led to the decline in local market sales of new and used cars.

The downturn comes against the background of consumers’ preoccupation with procuring and purchasing their needs in terms of supplies and study tools.

Egyptian auto market dealers anticipated that the market would witness a boom in sales in December, due to the general trend of consumers acquiring a new car during the holidays. There is also the tendency among companies to offer discounts on maintenance at approved centres to compensate for the decline in demand on car purchases.

Alaa Al-Sabaa, member of the General Automobile Division at the Federation of Egyptian Chambers of Commerce (FEDCOC), said that the market is currently witnessing lower car sales of between 10% and 20%.

This can be attributed to the return of the new academic year, particularly when compared to the sales recorded in August and September.

He added that car sales began to improve and move after a period of stagnation during the first quarter (Q1) of 2020, due to the local and global economic repercussions of the novel coronavirus (COVID-19).

Osama Aboul Magd

Al-Sabaa added that most car dealers and distributors in the Egyptian market have tended to reduce their monthly shares of dealership contracts, at a time when the market was witnessing a state of slowdown in demand for cars.

He expects that the market would witness a state of improvement during the next month due to the upcoming Christmas and New Year celebrations. Sales are also likely to be boosted by the return of expatriates from abroad.

Osama Aboul Magd, head of the Automotive Dealers Association, said that the majority of customers tend to place their office and school supplies needs first at the start of the academic year, consequently reducing the demand for vehicle purchase slightly.

Aboul Magd indicated that most of the market parties, including dealers, distributors, and agents, are betting on the final months of 2020 to boost their sales. This is due to the decline in sales during Q1 of 2020, due to the nationwide coronavirus outbreak.

He added that auto companies tended to provide offers and discounts on spare parts and repairs at approved maintenance centres, as well as granting free maintenance to stimulate car sales. He pointed out that these offers may contribute to relative improvement in the market performance during this November.

Aboul Magd expected that the second half (H2) of December 2020 will witness a returning boom in sales that the market witnessed during August and September, coinciding with the approaching Christmas and New Year celebrations.

In a related context, Ibrahim Ismail, Executive Director of the Friday used cars market in Nasr City, said that it is normal to see a dip in vehicle sales at the beginning of the academic year, due to their priority expenditures elsewhere.

Ismail suggested that the car market will witness relatively high sales beginning in the H2 of December, in conjunction with customers’ demand to acquire a new car during the holidays.

He said that that the same period every year witnesses an increasing demand on the part of consumers to buy and replace their vehicles.

Ismail added that car companies will launch discounts on their models as the holiday season approaches in December, in an attempt to attract customers who want to buy a new car during the holidays.

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