Egypt Autos Report Q2 2012
Includes 3 FREE quarterly updates
Egypt’s autos industry remains in the doldrums, with demand for new vehicles remaining depressed owing to a combination of economic and political strife. Sales fell during the revolution that saw former president Hosni Mubarak ousted from power. Total passenger car sales fell 31% in 2011, to just over 133,000 units, according to Egypt’s Automotive Marketing Information Council, as cited by the FT. This compares with passenger car sales of nearly 193,000 in 2010.
Egypt’s largest vehicle assembler and distributor GB Auto has announced its car sales in Egypt fell 20.2% in 2011, reports the FT. Revenue, including sales in Iraq and commercial and motorbike sales rose 7.9%. Net income dropped 26.1%. GB Auto will reduce its reliance on its Egyptian operations and its exposure to a potential currency crisis, Reuters reported in March 2012, citing the company's chief executive, who blamed a year of political and economic turmoil since the popular uprising in Egypt hit inward investment and tourism, depleting foreign reserves.
According to figures from Egypt’s Automotive Marketing and Information Council (AMIC), as cited by the Ahram online website in September 2011, total autos sales fell by 33% year-on-year (y-o-y) over the January-August 2011 period to just 111,108 vehicles. Looking at vehicle sub-segments, passenger car sales are down by 34.4% y-o-y at 83,700 completely built units (CBUs) sold to August 2011, while bus sales were also down by 34.7% at 7,865 units sold. Truck sales were down by 25.3% at 19,444 units sold, although this did represent an outperformance of the wider market.
Month-on-month (m-o-m) sales are also locked in a seemingly inexorable decline, with passenger car sales of 12,626 units for August 2011, representing an 11.5% decline m-o-m. Growth Potential However, industry commentators believe there is long-term growth potential in Egypt’s auto industry. Car ownership in Egypt is low even compared with the standards of developing countries, at 32 cars per 1,000 people, according to BMI’s 2009 estimate. This compares with 109 in neighbouring Algeria and 128 in China, according to GB Auto. Egypt also boasts a large youth population and is experiencing a ‘youth bulge’, according to US-based Population Reference Bureau, which claims one in five Egyptians is aged between 15 and 24, with one-half of the population under 25. A new government may also trigger a broader rise in consumer confidence.
Further encouragement for auto demand comes from talk of an increase in the level at which income tax is levied on salaries. The Egypt government may limit fuel subsidies and introduce progressive taxes as part of its economic reform program, Bloomberg reports in early May, citing Finance Minister Momtaz el-Saieed in the state-run Al Ahram newspaper. According to the report, the minister said 80% of fuel subsidies are enjoyed by the rich.
The report added the government will discuss tax and subsidy changes as well as other reforms with the country’s political and civil society groups. GB expects industry-wide car sales to rise 10 per cent this year, according to a report in the FT. A company spokesperson told the newspaper most new car buyers earning salaries of EYP£3,000-EYP£5,000 and use instalment schemes to pay for their vehicles.
The introduction of new, affordably priced cars to the market could also boost sales. In late February, GB announced it will become the exclusive Egyptian and North African assembler and distributor for Chinese carmaker Geely International. However, political transition is continuing to hit sales. BMI notes that car sales traditionally drop during times of political unrest. Carjacking is a big problem: there have been more than 16,000 reported carjackings since the overthrow of Mubarak in February 2011, according to Egyptian media. The prominent Egyptian Islamist and presidential candidate Aboul-Fotouh was hospitalised after a carjacking attack near Cairo in February, reported the MENA news agency.
Egypt’s autos industry remains in the doldrums, with demand for new vehicles remaining depressed owing to a combination of economic and political strife. Sales fell during the revolution that saw former president Hosni Mubarak ousted from power. Total passenger car sales fell 31% in 2011, to just over 133,000 units, according to Egypt’s Automotive Marketing Information Council, as cited by the FT. This compares with passenger car sales of nearly 193,000 in 2010.
Egypt’s largest vehicle assembler and distributor GB Auto has announced its car sales in Egypt fell 20.2% in 2011, reports the FT. Revenue, including sales in Iraq and commercial and motorbike sales rose 7.9%. Net income dropped 26.1%. GB Auto will reduce its reliance on its Egyptian operations and its exposure to a potential currency crisis, Reuters reported in March 2012, citing the company's chief executive, who blamed a year of political and economic turmoil since the popular uprising in Egypt hit inward investment and tourism, depleting foreign reserves.
According to figures from Egypt’s Automotive Marketing and Information Council (AMIC), as cited by the Ahram online website in September 2011, total autos sales fell by 33% year-on-year (y-o-y) over the January-August 2011 period to just 111,108 vehicles. Looking at vehicle sub-segments, passenger car sales are down by 34.4% y-o-y at 83,700 completely built units (CBUs) sold to August 2011, while bus sales were also down by 34.7% at 7,865 units sold. Truck sales were down by 25.3% at 19,444 units sold, although this did represent an outperformance of the wider market.
Month-on-month (m-o-m) sales are also locked in a seemingly inexorable decline, with passenger car sales of 12,626 units for August 2011, representing an 11.5% decline m-o-m. Growth Potential However, industry commentators believe there is long-term growth potential in Egypt’s auto industry. Car ownership in Egypt is low even compared with the standards of developing countries, at 32 cars per 1,000 people, according to BMI’s 2009 estimate. This compares with 109 in neighbouring Algeria and 128 in China, according to GB Auto. Egypt also boasts a large youth population and is experiencing a ‘youth bulge’, according to US-based Population Reference Bureau, which claims one in five Egyptians is aged between 15 and 24, with one-half of the population under 25. A new government may also trigger a broader rise in consumer confidence.
Further encouragement for auto demand comes from talk of an increase in the level at which income tax is levied on salaries. The Egypt government may limit fuel subsidies and introduce progressive taxes as part of its economic reform program, Bloomberg reports in early May, citing Finance Minister Momtaz el-Saieed in the state-run Al Ahram newspaper. According to the report, the minister said 80% of fuel subsidies are enjoyed by the rich.
The report added the government will discuss tax and subsidy changes as well as other reforms with the country’s political and civil society groups. GB expects industry-wide car sales to rise 10 per cent this year, according to a report in the FT. A company spokesperson told the newspaper most new car buyers earning salaries of EYP£3,000-EYP£5,000 and use instalment schemes to pay for their vehicles.
The introduction of new, affordably priced cars to the market could also boost sales. In late February, GB announced it will become the exclusive Egyptian and North African assembler and distributor for Chinese carmaker Geely International. However, political transition is continuing to hit sales. BMI notes that car sales traditionally drop during times of political unrest. Carjacking is a big problem: there have been more than 16,000 reported carjackings since the overthrow of Mubarak in February 2011, according to Egyptian media. The prominent Egyptian Islamist and presidential candidate Aboul-Fotouh was hospitalised after a carjacking attack near Cairo in February, reported the MENA news agency.
Contents
Executive SummarySWOT Analysis
Egypt Auto Industry SWOT
Egypt Political SWOT
Egypt Economic SWOT
Egypt Business Environment SWOT
Global Overview
Eurozone And Ems Pose Risks To 2012 Growth Outlook; US And Japan On The Rise
Passenger Car Sales (Units), Jan-December 2011
Regional Overview
SUVs Will Be Key To Premium Growth As Competition Hots Up
Industry Risk/Reward Ratings
GCC States Defy Lack Of Production To Top Autos Ratings
Table: Middle East And North Africa Autos Risk/Reward Ratings
Macroeconomic Forecast Scenario
Table: Egypt – Economic Activity
Industry Forecast Scenario
Production
Table: Egypt Autos Production
Sales
Table: Egypt Autos Sales
Trade
Table: Egypt Autos Trade
Competitive Landscape
Manufacturers – Passenger Cars
Table: Top 10 Best Selling Models in Egypt, January-October 2011
Commercial Vehicles
Suppliers
Motorcycles
Company Monitor
Middle East Becomes Key Battleground in Audi’s Global Leadership Campaign
Company Profiles
General Motors Egypt (GM Egypt)
Toyota Motor
Nissan Motor
Ford Motor
BMI Methodology
How We Generate Our Forecasting Model
Sources Skip to top