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Sunday, 18 February 2018

Local component requirements for Automotive Directive are being revised -Minister

LEGISLATION WATCH- Local component requirements for Automotive Directive are being revised: Trade and Industry Minister Tarek Kabil said yesterday that the minimum local component requirements that would make producers eligible for incentives under the Automotive Directive are being revised, according to a ministry statement (pdf). Kabil had said last November that auto 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 commercial vehicles. Local content requirements for light trucks would peak at 70%.

Timeline unclear: Kabil did not hint at a timeline for the bill to be introduced in the House or provide any other details. The Automotive Directive, which means to encourage local assemblers to move further up the value chain into manufacturing in return for incentives that would not be enjoyed by cheaper imports from the EU, Morocco and Turkey, has been stalled for months while a German consultancy firm advises on its redrafting. The latest from the rumor mill had claimed that the bill should be ready by 2Q2018.

The minister’s statements came during the inauguration of Belarusian state-run automotive manufacturer Minsk Automobile Plant’s (MAZ) new truck production line in Egypt, which has launched under a joint venture agreement with the Helwan Machinery and Equipment Manufacturing Company.

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