(Photo from Al-Borsa News)
Wamco Motors has acquired two new car franchises that will “change the market in Egypt,” according to Waleed Tawfik, Chairman of IDI Holding, Wamco Motors and China Town Egypt, and franchisee of China’s FAO for Car Manufacturing.
Wamco is seeking to attain additional foreign franchises, Tawfik told Al-Borsa newspaper, adding that any newly acquired franchises would be announced at the Automac-Formula exhibition in March. The exhibition will display all FAO classes of 2014 including the new Best Turn, Dream, Vita 2, and Oley models.
The new acquired franchises were the result of a close study of the Egyptian market’s needs in coming future, while considering IDI’s objectives of expanding its business within or outside Egypt and serving Egyptian customers’ needs, he added.
Tawfik went on to assert that all models would be available at the company by the time of announcement, and a client would receive his car on the same day of signing the purchase contract.
After undertaking several steps on the way of producing a car with 60% Egyptian components, Tawfik announced his company’s objective of manufacturing a 100% Egyptian car. This 60% is a start, he said, as well as the founding of a global research centre and future cooperation with several feeder industries.
IDI Group will direct its 2014 investments to all sectors of the commercial cars’ market including buses, microbuses, and heavy and light transport trucks, Tawfik said, adding that the company would not exit the taxi market under any circumstances, and would continue to work on its growth and development.
Tawfik revealed that 2014 would mark the start of an increase in the group’s investments in Egypt, and simultaneously its foreign partners have decided to pump $100 million in cooperation with IDI as a first stage, after considering the Egyptian economy and market stability. He added that IDI’s Egyptian investments over the last 20 years exceeded EGP 600m.
Tawfik discussed his new idea of establishing a car supply company importing high quality, cheaply-priced cars that would be accessible for ordinary citizens looking for a taxi at a competitive price to make a living, adding that he intends to assemble these cars domestically after the expected high demand.
Wamco Motors targets having a 30% share of the Chinese assembled cars’ market in 2014, besides 40% of imported Chinese cars “CBU”, clarifying that this percentage will grow gradually.
Wamco Motors’ service centre in Abo Rawash industrial zone will be opened next year at a cost of EGP 15m on a 3000 m2 space following a nine-month postponement for macroeconomic reasons, Tawfik said.
The over 100% rise in spare parts prices will benefit Egyptian spare parts manufacturers, he explained, since it will see a higher percentage of Egyptian components in cars assembled domestically, thus creating new factories and offering job opportunities in complementary industries.
Tawfik stated that the coming period will feature a technological cooperation between FAO China and Wamco Motors, resulting in substantial benefit for the Egyptian industry.
Tawfik evaluated 2013 as an exceptional year in the automotive sector, highlighting that his company achieved 25% of its target by the year end.
Tawfik claimed that the fourth tariff tranche on imported European cars is not a concern, saying, “Competition with European products does not worry me” since a 6% rise in the exchange rate with the euro would compensate for the tariff reduction.
Tawfik stressed that the rise in the US dollar exchange rate since the end of 2012 end until last August rendered the decrease in European car prices moot, even though car prices increased a further 20%, leading to a form of partial recession in the market.
Egypt’s interests oblige it to abide by the European Partnership agreement, and domestic manufacturers and assemblers’ principal benefit is in accessing the European markets through exporting high-quality Egyptian products, according to Tawfik.
He added that foreign investors are not afraid of investing in Egypt, but are “looking forward” to the “emerging” Egyptian market, “especially the automotive sector”.
IDI Holding Group includes several companies in different fields, including tourism, multimedia, assembling and manufacturing taxi and commercial cars, financial leasing and products’ transportation.
Wamco Motors launched its business during the 1970s and 1980s, when it acquired exclusive distribution rights for the FIAT 128 Nasr nationwide. Then, it obtained the distribution rights for Jeep in the early 1990s followed by Korea’s KIA’s Sephia and Spectra until 2007 when the franchise moved to EIM.
The Korean Mother Company KIA granted several prizes to Wamco as the global leading distributor and service centre.
Afterwards, Wamco brought several Chinese car franchises that were not very popular as China was just taking its first steps towards manufacturing cars. Then “Wamco” acquired “FAO” and “Nobel” franchises, and the latter is similar to “Smart Cars”, besides that the “Okma” electric cars franchise.
FAO is a high quality Chinese engineering company, a leader in the Chinese car manufacturing industry, with its annual production totaling to 3 million cars, in addition to its partnerships with European companies such as Volkswagen, and the US General Motors and Japanese Toyota and Mazda. Furthermore, the company owns the largest car engines factory in China as well as being the first supplier of cars and submarines to the Chinese army.
Wamco during the last three years approached FAO, the mother company, to grant the Egyptian government an aid of $100m to develop the Engineering Cars Company, subsidiary to the Holding Company for Shipping and Ground Transportation, to manufacture cars in Egypt. The intense bureaucracy led to the diversion of the grant from Egypt to Algeria, which received $60m to produce 10,000 cars in the first stage of manufacturing.
In 2009, Tawfik had agreed with two Chinese companies on establishing a Chinese Investment City in Egypt known as “China Town” including large, small and medium factories to produce and assemble all forms of the Chinese goods and products. Moreover, founding an entertaining city and houses designed in the traditional Chinese styles, and therefore, a company known as “China Town Egypt” was initiated and headed by Tawfik.
Translated from AlBorsa newspaper
