A number of the most prominent actors in the automotive industry expressed their concern over the current status of the sector on Wendesday at the Automech Formula exhibition.
The exhibition, taking place from 16 to 21 March, gathers some of the key industry players and agents.
Ahmed Al-Gharib, the general manager of MTI, the agent of Jaguar and Land Rover in Egypt, expressed his dissatisfaction over the current status of the Egyptian automotive sector.
However, he applauded the Central Bank of Egypt’s decision to significantly adjust the foreign currencies’ exchange rates, which he noted would translate into an increase in the price of automotives.
The central bank issued a decision Monday to devalue the Egyptian pound by EGP 1.12 against the dollar, holding an exceptional dollar auction on the same day. The decision was met with mixed responses, having sparked concern over its effect on inflation and the budget deficit.
Moreover, the automotive sector in Egypt has seen its own number of hurdles, particularly the lack of a unified strategy governing the industry, despite repeated calls for it.
Further, during the exhibition, Ahmed El-Khadem, managing director of EIM, the agent of Kia motors in Egypt, expressed his satisfaction with the level of participation this year, in light of the tumultuous events witnessed in the country, which he said negatively affected the automotive sector.
El-Khadem noted that the central bank’s decisions caused instability in the market, preventing automotive companies from being able to set final prices for the products.
He nonetheless contended that a number of companies did not participate this year, due to the recent events in the country.
Meanwhile, Al-Gharib noted that while the Automech exhibition is widely awaited in the sector, recent events affected the participation of automotive companies. However, he described this as a better opportunity for his company to showcase its new models to customers.
He said MTI will introduce a number of new models to the Egyptian market, hoping that customers will be able to absorb the new rise in prices, noting that while he had projected a sales increase of 15%, he doubts this number will be met in light of recent hurdles.
Among other obstacles facing the industry are limitations in terms of the numbers of cars they can import, and difficulties in obtaining letters of credit to allow for importing cars.
In efforts to shore up domestic production, the central bank recently stiffened import regulations. The new regulations required documents to come directly from foreign banks, rather than importers, to allow banks to provide importers with credit facilities, to prevent any manipulation of the receipts by importers.
Nonetheless, El-Khadem pointed out that this session of the Automech exhibition is crucial to ensure the market’s ability to restore its power.
He also added that Kia motors is introducing the fifth model of the Kia Sportage Turbo during the exhibition for the first time this year. “We hope it will make a leap in the Egyptian market and will meet the requirements of Automech visitors,” El-Khadem said.