Fallout from war in Ukraine officially hit the auto industry in March — as expected
Passenger car sales fell 3% y-o-y in March, according to figures from the Automotive Information Council (AMIC), an industry association to which most distributors report sales. AMIC data shows that around 18.9k cars were sold in March, down from 19.5k in the same period last year. That ends a run of growth that began last year. You can thank shortages of components, rising inflation, disruption to local production, a slowdown in imports, and the upward pressure on prices following the float of the EGP toward the end of March. Last year saw the sector shrug off the global chip shortage as strong demand pushed sales to their highest levels since the EGP float in 2016.
- Total vehicle sales fell sharply: Overall, the auto industry sold 23.8k vehicles during the month, down 9.4% from last year.
- A massacre in truck sales: Truck sales saw the most significant drop out of any other segment, falling 32.9% y-o-y to nearly 3.2k.
- Bus sales extended their drop: Some 1.7k buses (historically, the worst performing segment) were sold in March, down nearly 16.6% y-o-y thanks to cutbacks in the tourism industry, which is reeling from the drop in Russian and Ukrainian tourists.
This was expected: The impact of the war in Ukraine on the industry — including soaring commodity prices, further supply disruptions and the EGP devaluation — was expected to be felt properly in March, industry insiders told us last month.
Car prices were rising — until the gov’t imposed caps: As of last month, car dealers were not able to hike prices above the price set by the official distributor. Dealers that sell at higher rates will face fines of up to EGP 2 mn. Many dealers have been hiking car prices, or refusing to sell at all, since the EGP devaluation. It’s not clear how long the price freeze will last.
AMIC data is self-reported by member distributors, who include the majority of (but not all) industry participants.
IN OTHER AUTOMOTIVE NEWS-
Is Mercedes-Benz interested in investing more in Egypt? Trade and Industry Minister Nevine Gamea met with Mercedes-Benz Egypt CEO Gerd Bitterlich on Tuesday to discuss the company’s current and future investments in Egypt, according to a ministry statement. Key points in the talks included discussion of the government’s automotive strategy (the updated version of the now-defunct automotive directive), which aims to increase local vehicle manufacturing and assembly and increase the sector’s competitiveness to become a regional manufacturing hub and bolster export volumes. Gamea stressed that this would be a government priority.
Want to read more on what the automotive industry wants to get out of the strategy? Read our inaugural Inside Industry story here.