Back to the complete issue
Sunday, 26 June 2022

We’re not done with auto news just yet

Abou Ghaly Motors is now in the final stage of negotiations with Chinese automaker Geely to begin producing their cars in Egypt under a long-term contract, Abou Ghaly’s commercial director, Tamer Kotb, told Enterprise. Abou Ghaly is conducting feasibility studies and the two sides are now finalizing details including pricing, volumes, local component usage rates, and what kits to import, he explained. Geely is expected to provide the know-how, technical support, and quality control.

Contracts are expected to be signed by the end of July, with an eye to starting production in August 2023, Kotb added. The cars will be produced at the factories of the Arab Organization for Industrialization’s Arab American Vehicles Company in West Cairo. The company plans to start by producing 4k cars in the first year and grow output by 20% annually until it reaches 7k cars per year, Kotb said.

Abou Ghaly is accelerating the timeline as importing cars to the Egyptian market becomes more difficult, Kotb added. The move also comes amid the state’s local manufacturing push — including the launch of its Egyptian Automotive Industry Development Program (AIDP). The automaker will begin by using 45% local components and gradually increase that percentage with time, he told us.

The local automaker will start with one of Geely’s traditional economy lines before moving into EVs: Abou Ghaly plans to soon shift to manufacturing Geely’s electric vehicles (EVs), but is waiting for local demand to grow and the infrastructure to develop, Kotb explained.

The longer-term strategy is to build a dedicated factory for Geely cars with the aim of making Egypt the Chinese company’s manufacturing hub for MENA and later Europe, Kotb told us. The factory will have the capacity to manufacture 20k cars every year, but a timeline has not yet been set for its launch.


Some 20k vehicles were delivered in FY2021-2022 in the government’s natgas vehicle replacement strategy, where traditional passenger cars, taxis, and microbuses are replaced by dual-fuel vehicles that run on natural gas, a statement by the Finance Ministry read. The government has received some 39k requests to participate to date in the scheme.

The state has so far spent some EGP 465 mn on the plan and recently added Sharm El Sheikh to the initiative, which now includes Luxor, Aswan, Cairo, Giza, Qalubiya, Alexandria, Port Said, Suez and the Red Sea, the statement read.

The plan was expected to see 250k old cars swapped out with natgas-run cars by the end of 2023, Trade Minister Nevine Gamea said in 2020, but shortages and price hikes for raw materials have caused issues. Companies participating in the program were last month given the greenlight to hike prices by up to 45% in response to rising inflation.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.