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Sale of 279,300 vehicles expected by end of 2015: AMIC report - Daily News Egypt

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Sale of 279,300 vehicles expected by end of 2015: AMIC report

Passenger cars sales amount to EGP 30bn, 32,900 buses were sold in 2015


The Automotive Marketing Information Council (AMIC) issued a report on expected total car sales during 2015. The report will be reviewed by governmental agencies during the second annual Egypt Automotive summit.

The report showed that sales will drop by 5% since 2014 with a total of 279,340 will be sold by the end of 2015 compared to 292,980 last year.

Despite the drop, 2015 sales are still more than the sales achieved from 2009 to 2013. For passenger cars, AMIC estimated the sale of 196,470 cars this year compared to 207,970 last year—a decline of 6%.

Meanwhile, the report anticipated a 7% increase in bus sales with 32,960 units compared to 30,920 buses sold last year. AMIC estimated a drop in trucks sales by 8% with the sale of only 49,900 units compared to 54,000 units last year.

About 127,700 locally produced cars are expected to be sold versus 144,600 cars in 2014, a decline of 11.69%, while the market will see an increase of sale of imported cars by 2.2% since the report estimates that 151,600 cars will be sold by the end of the year compared to 148,300 in 2014.

AMIC Director Mustafa Hussein told Daily News Egypt that about 280,000 cars will be sold, a drop of only 4-5%, despite the challenges the sector has been facing.

Hussein said that the government should realise the importance of the automotive sector because it provides the state’s treasury with direct custom fees and taxes, in addition to indirect taxes collected from after-sale services, commercials, and profit taxes.

“The state’s direct revenue off the sector is about half of the income from the Suez Canal, including customs, taxes, and development fees,” he said. “About EGP 15bn is collected through taxes and customs on passenger cars only in 2015”.

The automotive sector is a large employer, where for every thousand sold cars, 22 job opportunities are provided “in addition to indirect jobs,” he said. Feeder industries can help the national economy with products released in the market and those exported abroad.

The automotive sector however is still facing many challenges, most importantly are the disputes between car importers and the Egyptian Customs Authority over the indicative prices of imported cars, as well as the lack of government vision for the development of the sector.

Hussein called upon the government to engage discussions with investors to draw a strategy that improves the sector. “This can be better than having each party put their own strategies,” he said and that the dollar liquidity reserve is burdening the sector. “The policy imposed by the Central Bank of Egypt only (CBE) benefits exchange companies”.

The state can develop alternatives to secure dollars based on remittance from Egyptian expats, since the state estimates that about $19bn is available abroad while only $3bn to $4bn enter the banking system and the rest going through exchange companies.

He called on Egyptian banks that have branches in Arab countries to provide Egyptian expats with incentives, such as purchasing dollars at higher rates to allocate them for luxury goods.

The Egyptian automotive industry has been in a constant stalemate since Nasr Automotive stopped operations and after requests by international companies – such as Volkswagen, Ford, and Renault – to enter the market were neglected. “Other countries in the region attracted those companies to develop their markets as a result,” Hussein said.

An effective automotive strategy should rely on exporting, especially automotive components. “Chances to exporting cars are low, while feeder inputs can attract foreign investment,” he said.

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https://dailynewsegypt.com/2015/12/08/sale-of-279300-vehicles-expected-by-end-of-2015-amic-report/
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