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Sunday, 7 July 2019

Egypt in talks with a number of automotive companies for local assembly

EXCLUSIVE- Tata joins host of automotive companies in talks to invest in Egypt: India’s Tata Motors is in talks with the Egyptian government to assemble its cars locally in Egypt, two officials close to the talks told Enterprise. Meetings with Tata and other automotive companies from Japan and China will continue until early next year, with agreements expected to be signed soon after, the officials said. This comes as Nissan is in talks with the Trade and Industry Ministry for a project in Ain Sokhna, Public Enterprises Minister Hisham Tawfik told the local press, without providing details on the potential project. The Trade and Industry Ministry is also in talks with China’s Dongfeng, which is seriously studying the possibility of manufacturing electric cars in Egypt, which can be used by the government, turned into taxis, or exported to Europe, the ministry said. Sources had told us last month that Suzuki and Isuzu were also holding talks with the government to invest here.

Is Raya getting a piece of the action? Raya Holding subsidiary Raya Auto CEO Tamer Abdel Aziz was quoted in the press yesterday saying the company is in talks with one Indian and two Chinese global automotive companies, all of which were unnamed, to manufacture electric vehicles and motorcycles in Raya’s recently inaugurated 6 October factory. The company opened talks with the Trade and Industry Ministry last month to obtain a manufacturing license, and then said it is planning to assemble light electric vehicles with initial investments of EGP 110 mn.

What’s gotten all these companies interested? News of the talks began appearing not long after it was revealed that the government was leaning towards a package of incentives for the auto industry eerily similar to the long-awaited automotive directive. Sources told Enterprise at the time that the incentives, which would include customs breaks reaching 100%, would be a sliding scale based on how much local content manufacturers use, starting at 10%. The new incentives program is with the Madbouly Cabinet for review. Mercedes-Benz signed an MoU earlier this week with the government to set up an assembly plant in the Suez Canal Economic Zone (SCZone).

Can we just forget about El Nasr, already? An MoU signed between Nissan and state-owned El Nasr Automotive in March, which would have seen the former use the latter’s factories to produce 100k cars annually, has been terminated, Tawfik said. The signing had followed remarks by Nissan’s MENA and India Chairman Peyman Kargar to Bloomberg that the company was looking to increase its output from its factory in Egypt to 28,000 vehicles, up from 22,000, this fiscal year. Yet despite this, and the decades-long flatlining of the company, the government still cannot bring itself to pull the plug on it. The Public Enterprises Ministry is also planning talks with a number of Chinese and Korean companies to manufacture electric cars at El Nasr-owned facilities, Tawfik said.

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