Ghabbour says gov’t lacks vision for the automotive industry: The Madbouly Cabinet’s economic group has made it clear that it wants to come up with a strategy to encourage automotive manufacturing in Egypt, but it’s being held back by a lack of vision for the sector, GB Auto Chairman Raouf Ghabbour tells Al Masry Al Youm in a high-profile interview. Ghabbour suggests the industry is being held back by policymakers who need to understand what goes into building an industry from the ground up.

Any successful program for the industry must begin with protecting the investments we already have. That entails amending existing laws to make auto assemblers and manufacturers able to compete with products imported under trade agreements, Ghabbour says. This protection should then be offered in exchange for domestic players meeting certain requirements, including increasing the percentage of domestic components they use, exporting more, and investing in research and development to continuously improve quality. Locally produced vehicles must be given a significant price advantage and domestic manufacturers should be granted a package of incentives such as those offered in countries whose auto industries have flourished, such as Turkey and Morocco.

What does Egypt have to gain from building up its auto industry? By Ghabbour’s calculations, if locally produced cars hit a 50% domestic component requirement within 10 years’ time, Egypt could save some USD 11.25 bn per annum. That figure is based on the assumption that our spending on imported components would reach around USD 22.5 bn in 10 years without the industry strategy. Using the same math, Ghabbour says the industry could also generate USD 5.6 bn in hard currency flows per year if around half of the industry’s output of manufactured vehicles is exported by that time. That’s to say nothing of the jobs that would be created in the process of building up the industry, he notes.