Egypt’s automotive sector has been going through a massive transformation recently, as the government started various initiatives aiming to boost the local industry. President Abdel Fattah Al-Sisi also recommended continuing efforts to shift from assembly to manufacturing and to localise the freight transport and trucking manufacturing in Egypt in cooperation with major international companies.
Deputy Head of the Chamber of Engineering Industries (CEI) affiliated to the Federation of Egyptian Industries (FEI), Abdel Moneim El-Kady, said that domestic manufacturing of trucks in Egypt is not a hard task, given that Egypt is fully qualified to manufacture trucks instead of assembling them.
He added that the railway carriage industry is also similar to the manufacture of passenger cars and trucks, because of the similar components used such as glass, seats, brakes and other components.
El-Kady explained that the percentage of the local component within the trucks may reach 45%, due to the decisions of Amr Nassar, Minister of Industry and Trade, up from the 40% local components currently.
Furthermore, he said that car manufacturing could save Egypt a lot of foreign currency and increase the labour force.
He expressed optimism about the development of feeder industries in Egypt once these incentives are implemented, with the support of the political leadership and its orientation to the localisation of the car, trucks and railway carriages industries, which may attract many investors to start manufacturing operations in Egypt.
Initiatives recently launched by some global auto manufacturers to assemble their car locally, such as Mercedes Benz, MG, BMW and SEAT, is an indicator of the success of President Abdel Fattah’s Al-Sisi plan to localise the industry.
For his part, Chairperson of the Egyptian Auto Feeders Association (EAFA), Ali Tawfik, divided the freight vehicles into four categories starting with small vehicles that can carry weights ranging from 0.5 tonnes to 1 tonne.
The second category freight vehicles that can transport loads of 1.5 tonnes to 4 tonnes such as semi-trucks, and pickups. These two categories are easy to manufacture inside Egypt, due to the availability of feeder industries, which include seats, chassis, fenders and doors by up to 70%. This is mainly driven by their lack of luxury equipment, unlike passenger cars.
The third category has a capacity of 4 tonnes to 10 tonnes. This category is scarce in Egypt, as they are not in high demand, thus their local manufacturing would be largely useless. However, specialised trucks are still manufactured in Egypt, such as concrete mixers, buses, and petrol trucks, and they have added value.
Tawfik pointed out that the fourth category includes electric trucks, where the state is in talks with a German company to manufacture an electric tram, besides, there several discussions with Asian companies to help them manufacture electric vehicles in Egypt.
He added that military production plants also aim to produce electric buses, as there is already a company affiliated to the Arab Organization for Industrialization called “Semat” working in the manufacture of rail carriages.
However, Tawfik said it is difficult to manufacture the locomotive itself in Egypt because it requires a large amount of steel, electricity and equipment that is not available.
Moreover, Omar Balbaa, the head of the automotive division of the Federation of Egyptian Chambers of Commerce, agreed that Egypt has a strong infrastructure, that would allow the country to establish freight transport trucks, railway carriages.
He added that manufacturing volume in the near term would only be limited to the domestic market until the industry matures. He explained that the localisation of the auto industry would also create new jobs, and attract investors.
