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Government has no clear vision for automotive industry in Egypt: FEI official - Daily News Egypt

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Government has no clear vision for automotive industry in Egypt: FEI official

Engineering industry presented automotive strategy to Ministry of Industry, received no response

Hussein Mostafa  (DNE Photo )
Hussein Mostafa
(DNE Photo )

By Ahmed Amer

A state of conflict prevails over the automotive industry sector in the run up to the Economic Summit, after the agenda of the summit showed the absence of automotive industry projects.

Automotive sector experts expressed their discontent with the government’s negligence to the automotive industry and its exclusion from the projects presented in the summit.

Experts questioned the exclusion of the project for reviving Nasr Car Company (NCC), despite the government being behind the call for its revival.

Hamdy Abdel Aziz, Chairman of the Chamber of Engineering Industries in the Federation of Egyptian Industries (FEI), pointed out that there is not a single automotive project to be presented in the summit.

“There is no clear government policy regarding the automotive industry,” added Abdel Aziz, noting that the state still has no vision regarding the automotive industry, thus it did not include it in its economic concerns.

He pointed out that the local automotive industry depends mainly on the customs incentives for the high tariffs paid by importers, which gives it a competitive advantage. However, the government is currently moving towards the reduction of customs on cars imported from Europe, and the erosion of customs off the importer, which complicates the competitive opportunities of the local product against the imported.

Hussein Mostafa was surprised that the project aimed to revive Nasr Car Company (NCC) was not included among the projects suggested in the Summit. He highlighted that this project was called for by the government, with the aim of improving and developing the automotive industry.

A source in the Committee for the NCC Revival declared that the Zaki Basiouny, head of the Holding Company for Metallurgical Industries (MICOR) and president of the Committee, will send a letter to Minister of Investment Ashraf Salman demanding the inclusion of the NCC revival project among the projects that will be presented in the Economic Summit.

The source pointed out that the NCC revival project needs a means of promotion to attract partner for foreign direct investment in the project, stressing that the government has to pay attention to this project, as it became clear that the government was ignoring the automotive industry.

The source pointed out that the committee negotiated with two companies; a Chinese and a Japanese company, both of which investigated the situation and visited NCC. Negotiations are still ongoing but without any results. As such, the two companies delayed their response to the partnership offer.

He added that the company partnering with MICOR will have the right of management, as it is considered the company specialised in the automotive industry, rather than MICOR. This is among the means for attracting international partnership for the revival of the NCC project.

In case of the negotiations’ failure and finding ways to market and attract investments to this project, the committee will then offer the automotive factory in the company (Warehouse 4). This will be open for the use of others in manufacturing and assembling, as 90% of the line equipment needs to be changed, in addition to the development of the line of “Iron sheet treatment against rust”.

Amr Nassar, member of the Board of Directors for Automotive Marketing Information Council (AMIC), said the Minister of Investment called on all automotive companies to present their projects to investment banks affiliated to the ministry to hold a special session for the automotive sector during the Economic Summit, during Salman’s attendance of the annual Egypt Automotive Summit last December.

Nassar noted that the non-inclusion of projects of the automotive industry during the summit is not responsibility of the state, but rather of the automotive sector, as they did not present the investment banks with a clear automotive industry project.

Commenting on the non-inclusion of the NCC revival project, Nassar added that it is possible that the government has no clear strategy for the development of NCC, or that the project may lack incentives for the attraction of investments for this project, and need more time.

Minister of Investment Ashraf Salman previously called upon the automotive companies to present the government with suggestions for the required incentives during the annual Egypt Automotive Summit. He further stressed that the government is sincere in helping the automotive industry, as a part of the economic reform programme. He added that the Ministries of Industry, and Investment are willing to present the automotive companies’ suggestions to the cabinet, to see how the government can develop these industries.

Salman stated that the government welcomes the presentation of the sectors` projects during the Economic Summit. However, specific investment opportunities should be determined, and it should be through investment banks, as Egypt has 14 investment banks. Salman called upon the companies to present their projects to one of the investment banks, in order to be discussed during the Economic Summit. 

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