Egypt Urged to Revamp Auto Industry Policy, Following Morocco’s Model

It is not logical for automotive groups established in Egypt to pay customs duties on imported parts for local assembly, while such taxes are not applied to fully imported vehicles, said South African Mike Whitfield, Managing Director for Africa at Nissan, the leading vehicle producer in Egypt, stressing that "the automotive assembly industry in Egypt needs to be protected", with the certainty that if this became a reality, Cairo could become a regional hub for vehicle production, reports Jeune Afrique.

"The Egyptian government found the right balance in 2020 between protection against the pandemic and maintaining economic activity," said Mike Whitfield, estimating that "the government could further help increase the size of the local market by facilitating access to car loans for more Egyptians." Moreover, in June 2019, the Mercedes-Benz group signed a memorandum of understanding with the government. Not to mention that the production of the first Egyptian electric car assembled locally by the Chinese company Dongfeng Motor should start by the end of 2021.

For the analysts of the Lynx Strategic consulting firm based in Cairo, "the weakness of R&D investments has led to the production of low value-added automotive components in Egypt," thus suggesting customs duty exemptions for imported equipment used in R&D.

It should be noted that the most comprehensive automotive industries on the continent are in South Africa and Morocco. And this is thanks to the dialogues between government, industry and social partners. This shows that dialogue is essential for the development of this sector, stressed Mike Whitfield.