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Monday, 14 May 2018

One step closer to launching the Automotive Directive

One step closer to launching the Automotive Directive? The Trade and Industry Ministry plans to hold a meeting today with a number of auto companies to discuss an order issued by minister Tarek Kabil last month on local content that is widely considered to be a forerunner to the Automotive Directive, said Tamer El Shafei, head of the auto components division of the Federation of Egyptian Industries. The meeting brief the companies on the order and start a dialogue. The order mandates that 46% of the components of a domestically-assembled car be sourced locally, and that 28% of a car has to be assembled in Egypt for it to qualify as an “assembled in Egypt” vehicle. This portion will be reduced by 1% every year following implementation of the decision. Twelve car assemblers will reportedly take part in the meeting, among them our friends at GB Auto as well as Bavaria Auto Group, and Nissan Auto Egypt.

Toyota Egypt throws its weight behind the Automotive Directive: Toyota Egypt CEO Ahmed Monsef expressed his support for last month’s order amending domestic component quotas. The order’s timing is also significant as the long-awaited Automotive Directive has yet to be issued, he added.

There are 231 days left until 1 January 2019. That’s when customs on vehicles imported from the European Union are set to fall to zero. The domestic auto assembly sector runs the risk of major downsizing if it hits 1 January without the protections mandated in the Automotive Directive, which would offer assemblers incentives to move up the value chain into manufacturing.

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