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Wednesday, 9 January 2019

Are zero customs on EU cars helping lower prices?

Are zero customs on EU cars helping lower prices? Egypt hosting the 2019 African Cup of Nations (AFCON) dominated the airwaves last night (and we have that coverage in the SR below), but what’s really got us interested is Hona Al Asema’s look at the impact of customs on European cars falling to zero on car prices.

1600cc and 2000cc European cars see prices fall by up to 20%: European cars with 1600cc engines have gone down between EGP 10,000 to EGP 50,000, Federation of Egyptian Chambers of Commerce’s auto division member Alaa El Saba told Hona Al Asema. Prices of 1600cc cars decreased 3-8% while prices of cars with engines of 2000cc or more were down by 15-20% (watch, runtime: 05:32).

Background: Auto assemblers have long sought to get the automotive directive — which sets incentives for assemblers to move up the value chain to manufacturing to compete with EU and regional cars — passed before customs on these cars fall to zero. Some, including GB Auto Chairman Raouf Ghabbour have claimed that customs falling to zero would not have the desired effect on prices. Regardless of where prices fall, it can only be helped further by competitive domestic manufacturing industry.

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