Automotive industry strategy: governmental support, private sector concerns

Maya Nawar
4 Min Read

As the parliament is still reviewing the automotive industry strategy, the private sector has voiced a number of concerns regarding the strategy’s content and implications, while the governmental sector and entities affiliated to the government appear to support the strategy wholeheartedly.

Ahmed ElKhadem, managing director of EIM, the agent of Kia motors in Egypt, highlighted that the strategy may contradict with some international agreements. In reference to that point, professor of business administration in the faculty of commerce at Tanta University and the Arab Academy of Science and Technology Yasser El-Kassrawy assured that the government is studying the strategy in a manner that does not contradict with international agreements, welcoming stakeholders to present their concerns to the parliamentary committee currently reviewing it.

While ElKhadem made clear that he does not oppose the strategy, he ensured his support for the strategy as long as it benefits the products of his company. Another concern he raised was the article in the strategy that stipulates that consumers would not pay taxes on their cars. He also remarked that non-European importers would not be affected by the strategy, as opposed to European importers.

His remarks were expanded on by Ahmed Fikry Abdel Wahab, chairperson of FAW Industrial Group, who stated that those reviewing the strategy should look into the articles establishing customs protection regulations. He referred to other countries who had managed to reach zero-customs agreements with the European Union for instance, such as South Africa. While he agreed that India, Morocco, Iran, and Turkey would also be good examples to follow, he vowed on the importance of the South African model as it depends on providing incentives. Morocco, on the other hand, is much more export-oriented, which is a pillar that Egypt had not been able to establish yet. “Until we can establish a real industry, we cannot work on exporting,” he stated.

His point was echoed by Raafat Samir El-Khanagry, vice president of the Feeding Industries Division at the Federation of Egyptian Industries, who explained that the local manufacturing industry is usually accused of not being ready for development and of having not enough factories to be properly established. He, however, assured that the automotive industry strategy will develop the feeding industries.

Despite the concerns raised by mainly the private sector, member of parliament and head of the parliament’s Industry Committee Tarek El-Sayed guaranteed to all session participants that the system under which the strategy will be implemented will make sure it is beneficial to all stakeholders in the industry. He revealed that the strategy will take four to five years to be implemented, assuring that the strategy will be suspended if any violations are found.

While barely any of the participants touched upon the amount of local components used in car manufacturing, which is to be set in the strategy, El-Kassrawy noted that the industry will not develop unless local components are re-evaluated.


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