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20% increase in prices of motorcycles over 2 months - Daily News Egypt

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20% increase in prices of motorcycles over 2 months

The customs exchange rate and foreign currency shortage has led to a decline in imports by 60%


The prices of motorcycles increased by 20% in less than two months as the result of price hikes on imported parts and the increase in the price of the customs exchange rate against the US dollar.

Gamal Abd Al-Moety, the chairperson of the motorcycles and bicycles division at the Federation of Egyptian Chambers of Commerce (FEDCOC), said that the price hikes have led to a decline in imports by 60%. This is a result of restrictions imposed by the government, including a higher customs exchange rate and the flotation of the Egyptian pound, as well as the foreign currency shortage.

The Ministry of Trade and Industry decided to ban imports of certain goods and products, including motorcycles, regular bicycles, and motorised bicycles, if the factory producing such goods is not registered in the General Organization for Export and Import Control.

Abd Al-Moety added that the decline in importing spare parts led to a decline in the production of motorcycle factories by 50%. He revealed that importers completely stopped buying spare parts due to the fluctuations in the price of the US dollar and the dollar shortage, as well as the current economic recession.

He pointed out that exit of motorcycle and bicycle traders from the market is due to the decline in financial liquidity by 35%, as a result of the liberalisation of the exchange rate, and the government’s restrictions on imports.

He mentioned that the price increase of one of the most popular motorcycles CT 125, jumped from EGP 4,400 to EGP 5,500 compared to its price in the beginning of November, while children’s three-wheel bikes jumped from EGP 112 to EGP 140.

Abd Al-Moety disclosed that all motorcycle spare parts are imported by a 100% ratio, and are installed in Egyptian factories, due to imposed restrictions on finished products.

Of the countries leading in fueling imports of bicycles and motorbikes to Egypt, China acquired 80% of the market, followed by Italy, France, Germany, Japan, and India.

90% of bicycles are fully imported, while 10% are manufactured in Egypt by small workshops.

Abd Al-Moety denounced that the government made decisions pertaining to commercial divisions at the FEDCOC.

He also called on the government to provide industrial land to set up a factory for manufacturing bicycles and motorcycles instead of importing them, in order to save foreign currency.

The division presented several memorandums to the Ministry of Trade and Industry, but thus far no response has been received regarding their status. The division intends to inject investments worth between EGP 200m and EGP 300m to importers of motorcycles and bicycles and one of the Chinese factories, and to hold negotiations with some of the banks to finance the project.

The division concluded a protocol with importers and traders to increase the prices of stored bikes, before a further increase in the price of the US dollar, by no more than 30% in order to cover consumers’ needs following the price hikes.

Hazem Fikry, the chief financial officer of Abu Hawa Motorcycle Company, said that prices of motorcycle spare parts increased by 40% to 50% compared to the beginning of November.

He pointed out that the company’s three factories in Qalyub produce some spare parts with Chinese and Egyptian labour, including fenders and tanks, while other spare parts are being imported.

Mohammed Ahmed, an employee at the Al-Helw exhibition, said that the exhibition has not bought any new parts since the beginning of the price hikes and the increasing price of the dollar in the informal market. This was due to higher prices and low demand.

He added that consumers tend to buy used bicycles due to lower prices. The price of the DionA150 increased from EGP 3,700 to EGP 6,700, compared to its price in 2015.

Mohammed Mostafa, the director of Abou El Goukh company for bicycles, said that the average price of Chinese bicycles ranges between EGP 1,200 and EGP 1,500, and children’s bicycles for the ages of 6 to 8 range between EGP 500 to EGP 700.

He added that the price hikes of bicycles increased by 40% compared to November, while the prices of spare parts increased by 50%. Therefore, traders buy bicycles piece-by-piece.

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https://dailynewsegypt.com/2017/01/03/20-increase-prices-motorcycles-2-months/
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