The government has commenced with the implementation of a national initiative, under the directives of President Abdel Fattah Al-Sisi, to convert old petrol-fuelled vehicles to compressed natural gas (CNG), and stop licensing new petrol-fuelled cars.
Many local companies are seeking to participate with the state’s efforts to convert to natural gas as part of the country’s transformation into a green economy.
Amr Suleiman, Chairperson of Al-Amal Automotive Trading and Assembly Company, the Egypt agent for Lada and BYD, stressed that the CNG conversion initiative will benefit the country. This is particularly in light of the abundance of natural gas in Egypt, in addition to the lower operating costs associated with CNG-run cars compared to petrol, which saves 50% of petrol use.
Suleiman said that his company has contracted with natural gas companies, Gastec and Cargas, to produce cars that run on CNG, in line with the direction it has been going in for a while.
He explained that it is possible to import cars that feature a natural gas engine, especially since many of the parent car brands have models that run on natural gas. Although many Egypt agents do not currently import natural gas-fuelled cars, this is likely to change should new cars be required to work on this kind of fuel. At the same time, he noted that local companies can modify the cars that run on petrol.
Suleiman stressed that the customers do not have any concerns on purchasing cars that run on petrol because of the ease of converting them. He also said that when the customer requests a car that runs on natural gas, the Al-Amal Company will convert it for them, however the conversion project has not started yet.
He added that, so far, the company has not received any invitations to hold consultations on the upcoming project, noting that the last meeting was with Prime Minister Mostafa Madbouly and former Minister of Industry and Trade Amr Nassar in August.
Suleiman stated that the topics on the table during the discussions focused on the features of replacing the 14- and 28-passenger microbuses.
He added that the government has been making inquiries on the status of the factories producing these vehicles, their production capacity, and operational capabilities. For their part, the companies that participated in the meeting confirmed their readiness to implement the project. However, the project has yet to turn into the implementation and operational stages.
Suleiman also expects that the Ministry of Trade and Industry will soon present the basic features of the conversion to natural gas project, how to implement it on the ground, and the role of private companies.
He stressed the need to increase the construction of natural gas stations, to keep pace with the recent shift to this fuel in powering cars. The expansion in provision would prevent congestion at stations, and ensure that the fuel is accessible to vehicle owners.
Suleiman called on the state to provide appropriate facilities and set up a set of incentives and financing programmes for owners of old cars that are required to replace or convert their cars to natural gas. He said that the government should reintroduce the types of incentives brought in when taxi vehicles were replaced. This includes VAT exemptions on new and converted cars, customs duties exemptions on some components, as well as reducing the value of interest due on loans.
Khaled Saad, Secretary-General of the Egyptian Automobile Manufacturers Association (EAMA), said that the car replacement project is potentially useful to the state. It will ensure that obsolete, dilapidated cars that have been in use for over 20 years will be removed from the roads.
They will, he noted, be replaced with new vehicles that run on natural gas, which saves on fuel bills and reduce the significant bill the state pays in subsidies.
Saad added that old cars produce significant amounts of harmful emissions and exhaust fumes, unlike new cars which have been converted to work with environmentally friendly natural gas.
He pointed out that the state will start the conversion process first with cars and mini-buses, before moving onto other types of vehicles. He also pointed out that most of these cars use Gasoline 80, which is a source of great pollution when compared against other types of fuel.
Saad emphasised the 10% increase in the demand for microbus vehicles during the recent period, which reflects that customers are unconcerned about the natural gas conversion project.
Saad indicated that his company is preparing a study on the possibility of implementing the initiative, to conform with the required technical requirements. This would ensure the company can contribute to the governmental initiative. He also revealed the company’s intention to study the assembly of a Chinese bus in Egypt, powered by natural gas.
Nissan Egypt aims to expand local assembly operations for its natural gas vehicle, in addition to the three models it actually assembles. It is currently undertaking measures to produce natural gas-run cars that are environmentally friendly, and protect the environment against harmful emissions.
Chairperson for Nissan South and Managing Director at Nissan Egypt Mike Whitfield said that the company’s local manufacturing file is one of its most important. He added that Egypt is one of the most important markets in the Middle East for the Japanese brand, as it believes that the Egyptian market can clearly contribute to the progress of Nissan’s performance in Africa.
He said that this will occur through its manufacturing and export base, in light of the availability of labour and adequate operating costs to upgrade the national industry.
Whitfield also noted that the sector is anticipating the issuance of an automotive industry strategy, which will determine the path and vision of the parent companies’ investments in the local market.
He explained that investors need more clarification on the local manufacturing file and the various initiatives launched by the government to localise the vehicle manufacturing industry. This would ensure that the company can study market conditions, the size of the car capacity, available opportunities, and how to exploit them.
