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Monday, 11 December 2017

“Final” draft of the Automotive Directive coming in January

LEGISLATION WATCH- “Final” draft of the Automotive Directive coming in January: A final draft of the long-awaited Automotive Directive will be ready next month, said Industry Development Authority head Ahmed Abdel Razek. He tells Al Mal that factoring in input from a German consulting firm hired by the Trade and Industry Ministry was behind the delay in redrafting the bill — a process he blamed on the division within the auto sector on the incentives provided by the law, which is expected to grant local assemblers incentives to move further up the value chain to manufacturing. Trade and Industry Minister Tarek Kabil had said last month that the manufacturers would be eligible for incentives if they are able to meet a minimum local component requirement of 45%, which over the course of eight years would rise to 60% for personal vehicles and smaller of group transport vehicles. Local content requirements for light trucks would peak at 70%. Manufacturers would also receive exemptions from development fees if they produce a certain number of vehicles on an annual basis, or if they export 25-40% of their total output a year.

Not a moment too soon for auto assemblers, who have started eying expansion abroad: GB Auto Chairman Raouf Ghabbour called on the government to speed up the process on getting the law passed, saying that the delay had contributed to the company holding back on any new investments for the past three years. Ghabbour even implied he was considering expanding abroad, saying that Turkey’s Investment Support and Promotion Agency had offered the company incentives including rebates of up to 20% of the capital invested in an assembly plant there, according to Al Mal.

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