How popular is the automotive directive within the auto industry? Not very, according to leading industry figures and lawmakers speaking on the legislation to Al Mal. The arguments against the act, which is currently being explored by the House of Representatives, ranged from the domestic components targets being unrealistic, to the law working in favor of the major assemblers at the expense of smaller industry players, to the virtues of the government subsidizing the auto industry after the policy having proven to be a failure of the past 30 years. Almost all appear to agree that more needs to be done to support the development of the auto components and feeder industries.

Importers of fully assembled automobiles don’t like the bill: All of a sudden, people who have never assembled in Egypt say the law would, if passed, make it certain the companies for whom they sell goods will never assemble here. The legislation will jeopardise our trade agreement with the EU, said Karim Naggar, the CEO of the Egyptian Automotive and Trading Company, which distributes imported Volkswagen and Audi vehicles in Egypt. Furthermore, European car companies, which have a vested interest in maintaining exports to Egypt, have expressed concern about the legislation, he added. The law has hindered negotiations with Volkswagen to assemble three models in Egypt, he says, and has also given Spanish automaker SEAT cold feet. The law will impact Ford’s decision to assemble in Egypt, said Tarek Abdul Latif, head of operations at Abdul Latif Jameel. Government sources tell Al Borsa that the tariffs on European cars will drop 70% starting from January, as per trade agreements that will see tariffs eliminated by 2019.

The nation’s two largest assemblers do: GB Auto Chairman Raouf Ghabbour and archrival General Motors have both spoken in favour of the act, as we noted last month. In other words: Support for the direct is split along importer vs. assembler lines. Shocking, we know.