CAIRO: BMW announced this week that it will add a new model to the two that are currently assembled in Egypt. The company also released its sales figures for 2005, during which it achieved a 69 percent growth in local sales compared to the previous year.
BMW through its local partner Bavarian Auto Group (BAG) currently assembles the 3 and 5 Series models at a production facility in 6th of October City. The car maker will also begin assembly of its sports activity vehicle, the X3, in Egypt.
Michael Ganal, member of the board of management of BMW AG responsible for sales and marketing, said at a press conference that the first locally-assembled X3 will be delivered in May. Ganal is visiting Egypt for a regional meeting of the company s importers in Africa and the Caribbean. He also met earlier with Minister of Trade and Industry Rachid Mohamed Rachid.
The decision to produce a new model at the BAG plant is intended to serve the interests of several parties. We are always assessing the feasibility of assembling the car in the countries [other than Germany], says Helmut Broker, managing director of the Africa and Caribbean region for BMW. It must make sense for the customer and it must make sense for the importer and us.
BAG Executive Board Member Farid El Tobgui announced the company s sales figures in Egypt for 2005 at the conference. BMW sold a record 1,757 vehicles in the local market last year, up 69 percent from the previous year.
Local assembly, El Tobgui adds, allows Egyptian customers to receive new models nearly as quickly as other customers worldwide.
Egypt has managed to confirm its position as the largest market for the BMW Group among the Export Region Africa and Caribbean, BAG added in a statement. This gives Bavarian [Auto Group] strong ground to expand their ambitious aims throughout Africa and the Middle East.
The 3 Series represented some 53 percent of BMW s sales in Egypt last year. The larger 5 Series made up 39 percent of sales, with the balance composed of other BMW models as well as its Mini brand.
The reduction of customs has supported growth, particularly for smaller vehicles such as the 3 Series and the more recent 1 Series. Due to the decree of customs decrease on cars with capacities lower than 1600 cc (cubic centimeters), the market has been offering opportunities in this category of cars, says El Tobgui.
BAG anticipates further double-digit growth in its Egyptian sales this year.
With last year s increase in sales, El Tobgui says that BMW has surpassed Mercedes-Benz for the first time to become the leading seller of premium cars in Egypt.
Daimler-Chrysler, which produces a number of brands including Mercedes-Benz, told The Daily Star Egypt that it sold 2,653 luxury cars in Egypt in 2005. A breakdown by brand was not available in time for publication, but more details of the company s 2005 performance are expected to be announced shortly.
The delineation of the luxury or premium car market, however, is debatable. Premium is not linked to size any more, says Ganal. You can sell more and more small cars like Mini, which are nevertheless premium. You can charge a higher price for these kinds of cars.
At present, the cars assembled by the BAG plant are sold locally only and other models not assembled at the plant are imported.
The plant assembles an average of approximately 10 cars per day, well below its full capacity. There is therefore room for expansion for both domestic consumption and export.
The plant, which began production in 1997, represents a $35 million investment, with equipment procured from and tested by BMW. The facility employs 750 individuals, and with 45 percent of the value of the locally-assembled vehicles procured from domestic suppliers, El Tobgui says that the plant provides indirect employment to 1,000 workers.
Domestic suppliers provide a number of parts including the cooling system and the wiring harness.
BAG s top-line growth is consistent with the increase in sales quantity. The company s total revenues for 2005 amounted to LE 381.6 million, up 62 percent from the previous year.