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Monday, 13 July 2020

Car prices for 2020 models expected to drop, 2021 models to rise

You can expect car prices to ease a bit in the coming months before rising again later in the year, the car-crazy domestic press suggests.

Why car prices are going down… Dealers are overstocked right now after demand slumped thanks the nighttime curfew imposed earlier in the covid-19 epidemic and the weekslong shuttering of traffic police offices that licensed new vehicles. Karim El Najjar, executive director of the local agent for Volkswagen, Audi and Seat, among other brands, suggests prices are likely to drop as dealers try to move inventory.

…and then back up: Imports were down 25-30% during covid, El Najjar suggests, so there could be supply constraints on new models. And with the USD having strengthened against the EGP earlier this year, that could mean sticker prices for 2021 models and other new imports are 3-5% higher, El Masria Auto President Shadi Rayan told Al Mal.

The Finance Ministry and the Consumer Protection Authority are watching prices, with Magdy Abdel Aziz, a senior advisor on customs at the Finance Ministry, telling Al Mal that customers did not fully benefit from the government scrapping customs on imported European cars last year as dealerships did not always pass on the discounts to end users. The ministry’s price monitoring committee is talking with the CPA about dealers’ profit margins, he said, adding that the agency would “soon issue decisions that will benefit consumers.” He stopped short of offering details of how the CPA might try to regulate distributors’ already-thin margins.

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