Secretary-General of the Egyptian Automobile Manufacturers Association (EAMA), Khaled Saad, reaffirmed that the Egyptian economy is promising in general, and the automotive market is one of the sectors which has been affected significantly affected by the Egyptian economy reforms.
“I expect that by the end of 2018, car sales will reach 180,000 cars, which are raised by 40% compared to 2017, which experienced a total of 128,000 cars sold out. But, 2017 was tough for the market generally, because of the implementation of the new economic policy in Egypt. This policy that imposed the floatation of the Egyptian pound, which was implemented in November 2016, caused the recession to hit the automotive market for about 6 months in 2017. We had no sales during this period throughout all brands, as prices doubled,” Saad clarified to Daily News Egypt.
For the decrease of cars prices, especially the European manufactured ones, Saad stressed that these cars prices will not fall as many of customers think. He added that the prices of European cars already decrease annually by 10%. The customs on those cars have been decreasing by 10% annually for 10 years now. According to the Egypt-EU Association Agreement, which has been in effect since 2009, it will completely exempt customs by January 2019, Saad explained.
“During this time of the year, since 2009, the automotive market experiences sales turnover, due to the customers’ expectations that the prices will fall in a significant way because of the imposition of a new tranche of customs’ decrease. This situation remains until the beginning of the coming year, when the scene becomes clearer. Thus, the current controversy in this case is very typical” Saad stated.
Further, he revealed that about eight European car brands are sold in the local market, which make up only 15% of the sales volume. On the other hand, other brands occupy about 75% of the sales volume, especially cars whose prices range between LE200,000 and LE350,000, which are most in demand.
According to Saad, European manufactured cars prices, due to implementation of the last tranche of customs decrease, are expected to drop by about LE8,000 per car, for cars whose total value reaches LE1.5m, expecting that their sales will increase in 2019 to between 10% and 15% compared to 2018.