Egypt’s automotive market has been grappling with instability and unprecedented stagnation since March 2022, primarily due to a complex interplay of factors that have led to a sharp decline in car imports and a steep spike in prices.
The automotive industry in Egypt is facing a severe crisis, stemming from the disruptions caused by the Russia-Ukraine war and compounded by currency fluctuations and supply chain challenges. Khaled Saad, from the Association of Automobile Manufacturers, highlighted the mismatch between supply and demand, leading to soaring prices. Egypt’s membership in BRICS Plus could potentially alleviate the crisis by reducing dependency on the US dollar for imports.
Sales of vehicles have plummeted significantly, with passenger car sales declining by 65% and sales of buses and trucks also seeing sharp drops. The ongoing shortage of electronic chips, coupled with increased global shipping prices due to the Russia-Ukraine conflict, has exacerbated the situation, leading to inflated prices and decreased consumer purchasing power.
Imports of passenger cars have significantly decreased, contributing to the scarcity of spare parts and further driving up prices. The end of this crisis hinges on achieving economic development, reducing inflation, and stabilizing prices, along with ensuring the availability of foreign currency.
In response to the crisis, the Egyptian government is working on providing incentives to encourage the localization of the automotive industry, aligning with the Egyptian strategy for localizing the automotive industry launched in 2022. These efforts aim to position Egypt as a key player in emerging vehicle markets in Africa, signaling a commitment to long-term growth and stability in the automotive sector.
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