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Wednesday, 28 March 2018

Fiat, VW exploring auto manufacturing opportunities in Egypt -FEI

On a slow news morning, we start with a quickening drumbeat of stories suggesting that the automotive industry is attracting interest from global automotive industry players as people wait for news of the automotive directive, which would give local assemblers a competitive advantage against EU, Turkish and Moroccan imports provided the assemblers move further up the value chain into manufacturing.

European automakers Fiat and Volkswagen are said to be exploring manufacturing opportunities in Egypt, Federation of Egyptian Industries (FEI) Executive Director Khaled Abdel Azim said yesterday. FEI members have been meeting with FIAT executives, who are now deciding between Egypt, Morocco, and South Africa as possible locations to establish a manufacturing plant, he said, adding that both producers have inquired about the timeline and framework of the Automotive Directive, as well as the possibility for using locally-manufactured parts for their operations.

Automotive Directive driving the good news: Reports that the Automotive Directive would be issued some time in 2018 has been responsible for a recent wave of news for the industry. Last week we learned that Volkswagen has reportedly already tapped three Egyptian manufacturers — IDACO, MOBICA, and El Teriak Industrial Group — to become part of its global parts supply chain, serving demand at assembly facilities across the region. French multinational group Renault is also said to be in talks with potential local partners over a similar-style agreement, while Spanish automaker SEAT is expected to begin assembly operations in Egypt by 2020 through its local agent Kayan.

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