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Monday, 1 February 2021

Auto component industry feels the covid burn

Sales of auto components fell 20-30% in 2020 as the pandemic caused a slowdown in the domestic auto assembly industry, said Abdel Moneim El Kady, deputy head of the Chamber of Engineering Industries, according to Al Mal. Suppliers were hit as assemblers reacted to the fall in consumer demand by reducing or delaying orders, he said.

Strong auto sales don’t necessarily mean that suppliers had a good year: Despite the partial lockdown of the economy in 2Q, auto sales otherwise held up through 2020 rising 2.8% in the first 11 months of the year. But El Kady said that the strong sales didn’t translate into more orders for suppliers, suggesting that assemblers were clearing out accumulated inventory.

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