CAIRO: Egyptian carmaker GB Auto will build five new service centers in the country, officials told Daily News Egypt.
“The biggest center will be on the Cairo-Ismailia Desert Road then also in Alexandria, the Ring Road, Assuit and Suez,” Hoda Yehia, investment relations manager for GB Auto, told DNE.
While the cost for the new centers has not been estimated yet, Yehia said the company was currently calculating the figures.
“We had originally planned to build more centers, but we are slowing down and it is now being pushed back to 2012,” she told DNE in a phone interview.
In addition to more centers, the company also planned to increase their production capacity in its plant to 5,000 busses from their current 2,000.
There were also plans to export up to 1,000 busses by next year, which Yehia said they would first start in the Middle East and North Africa (MENA) region for this year, then move on to the rest of Africa, East Europe and then Europe.
GB Auto had around a 37.3 percent share of the market for busses in 2010 in Egypt.
Due to the recent political turmoil in the country, many companies have had to make some changes to their plans for the year and reduce costs, including GB Auto.
“We are still on track to reduce planned capital expenditure this year by LE 130 million ($22 million),” said Yehia.
Their planned capital expenditure for this year was approximately LE 400 million.
As far as the market goes, Yehia said they were just “trying to watch and keep a close eye on consumer behavior.”
“There is more focus on management, internal management and capital expenditure ; the market will take its time and then come back and go back to normal,” she added.
Yehia said they were just waiting to see what will happen, but believed that the market would obviously be hurt in the first quarter and possibly the second, but hoped that after that it would get better.
It is expected that sales will pick up in the summer as this is a usual peak season for the market.
Passenger vehicles make up about 75 percent of the company’s revenue while commercial vehicles only bring in about 8 percent.
She expected the sales of passenger cars to bounce back rather quickly with their decline in sales not to exceed 10 percent, but believed that the commercial vehicle market would be much harder and prove to be a tough year for that area.
In a press statement released early March, GB Auto CEO Raouf Ghabbour said “Pressure on the tourism industry and a general economic downturn…will make it unlikely corporates will opt to significantly expand or renew their fleets this year.”
Truck sales are expected to drop by about 30-50 percent due to the current situation but the company’s profits are not expected to be affected significantly.
With the stock market opening up after its closure since Jan. 27, Yehia said GB Auto stayed with the market and there was a low volume of trading.
She also added that the company received approval to be able to buy back shares if needed.
