The Egyptian government has allocated EGP 1bn in its fiscal year (FY) 2024/25 budget to finance a strategy aimed at localising the automotive industry, according to Finance Minister Ahmed Kouchouk. The plan seeks to attract investment partnerships in car manufacturing and increase local component production to over 45% this year.
Kouchouk stated that seven companies are currently registered in the automotive industry localisation initiative. The Customs Authority released the first shipments of production inputs under this initiative last August. Tax and customs transactions for registered companies have been automated to streamline processes. Egypt’s Finance Ministry has established a specialised unit to facilitate procedures and address any challenges faced by these companies. These efforts are intended to increase annual car production with greater local value added.
“We are continuing to communicate with car companies to encourage them to register in the new system in order to achieve the state’s goals in increasing the local component,” said Kouchouk. He affirmed that the government is working with relevant ministries to provide support and facilitate local car production.
Kouchouk clarified that eligibility for incentives is linked to achieving specific targets. He announced that Nissan has received its first incentive worth EGP 120m, which can be used to settle government debts. This will reduce the company’s financial burden and provide needed cash flow for operations.
