To mark the start of the third annual Egypt Automotive Summit, Daily News Egypt interviewed Khaled Saad, the general manager of Brilliance Bavarian Auto in Egypt, in order to better understand his vision for the summit and the points that it should discuss this year.
What do you think of the third Egypt Automotive Summit?
I think it is very positive and effective. The idea of the summit itself is innovative, as it presents the problems of the automotive sector with the utmost transparency.
The third annual summit aims to create a clear vision for dealing with the challenges that the automotive sector is currently facing. The objective is to contribute to a better future of investments into the trade and manufacturing of vehicles and the feeding industries. The conference will present suggestions and experiences from abroad, in order to highlight how the sector helps the growth of the gross national product and employment.
With the presence of government officials at the third annual summit, what are your demands?
I believe that the ideas and suggestions presented by the summit should be implemented. The annual summit discusses all the problems of the sector, in addition to the constructive presentation of these problems.
I appeal to the government to seriously implement the solutions and suggestions the summit presents, and to work on forming committees to follow up on the execution of the decisions agreed upon during the conference after it comes to an end.
What are the most prominent points you want to discuss during the third summit?
The automotive industry strategy has to be discussed during the summit, as the future of investment in the sector is tied to that strategy. All workers in the automotive industry are waiting to find out the finer details of the strategy in order to decide what they will do next.
What are the most prominent challenges facing the automotive sector now?
I have my concerns regarding current policies surrounding the import of fully manufactured cars. This policy should be modified as it allows for the creation of a monopoly in the market. It is very difficult to enact the automotive industry strategy because as it currently stands it caters only to large agents.
I demand that the government bodies that are concerned about the sector take into consideration what the Egyptian automotive market is currently going through in general, and what those working in the field are suffering in particular.
Is the monetary policy the Central Bank of Egypt considered one of the challenges facing the sector?
Yes, one of the major challenges facing the automotive sector is the flotation of the Egyptian pound, and the difficulty companies face in obtaining foreign currencies. The fluctuating customs exchange rate is also a large challenge.
I see that the high increase in the price of cars across the board, whether locally produced or imported, is one of the biggest challenges the sector faces, because heightened costs have diminished the purchasing power of the Egyptian citizen.
Moreover, the deposit ceiling on foreign currencies in banks is $250,000 a month. This amount is not enough to cover the size of investments in the sector and the vision that we have for its development.
What is your vision regarding investment opportunities in the Suez Canal Economic Zone and feeding industries?
The state must set a clear policy for local assembling. The Brilliance parent company entered the Egyptian market with the purpose of establishing an export base and aimed to establish a factory for the local market, allowing us to export throughout Africa through the COMESA treaty. However, given the general climate, the state’svision for the automotive sector, and the lack of investment incentives has led to the parent company ruling out the idea of establishing a factory in Egypt, until the state intervenes to save the automotive industry.
Also, some companies produce vehicles or parts thereof in Europe and export the end products to Egypt through the Egyptian-European partnership agreement. This agreement negatively affects the local automotive industry and the state should do more to protect them.
What do you think about the taxes and customs systems and its effect on the automotive sector and the feeding industries?
The tax and customs systems has a negative effect on the automotive sector and the feeding industries, as it has resulted in confusion, instability, and randomness in the market.
What do you think about the state’s monetary policy and its effect on the automotive sector?
We need more time before we can evaluate the effects of the flotation of the pound, whether we are looking at export levels and the depreciation of locally produced goods in overseas markets, or imports and the ability of the banks to meet the demands of importers.