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Tuesday, 6 October 2020

Volkswagen signs pact to produce natgas-powered vans for Egypt

INVESTMENT WATCH- Volkswagen wants to produce natgas-powered vans in Egypt — if it gets the right incentives: Egyptian Automotive and Trading, the local agent for Volkswagen, is looking to strike a seven-year partnership agreement with the Arab Organization for Industrialization to produce natural gas-powered versions of its Crafter and Caddy 5 vans for the local market, CEO Karim Naggar told Al Mal. The Crafter would be designed to replace microbuses used for public transport, while the Caddy 5 would substitute old passenger cars and taxis as part of the state’s plan to convert vehicles to gas-powered engines. Volkswagen last year announced plans to assemble natural gas-powered cars in Egypt, using more locally-produced components, and export the surplus to foreign markets with which Egypt has trade agreements.

The catch: Volkwagen wants customs and tax breaks, as well as a relaxation of labor laws to allow it to bring in more foreign staff before it goes ahead with an agreement, Naggar said. Company officials have met with the government to discuss its plans, he said, adding that they had a “positive impression” of the government’s natgas auto strategy.

Meanwhile, Russian-produced gas-powered versions of Skoda’s Octavia and Rapid models will be imported for the local market, once Kayan Egypt and Volkswagen sign an MoU before the Christmas holidays, according to Naggar, who is also Kayan’s CEO. Naggar did not provide additional details.

Want a refresher on the natgas conversion strategy? We took a deep dive this summer into the government’s multi-year plan to replace car engines in a three-part series in our weekly infrastructure vertical Hardhat: Part 1 | Part 2 | Part 3.

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