Hussein Mustafa, director of Automotive Marketing Information Council (AMIC), told Daily News Egypt recently that any vision of the future of Egypt’s automotive sector depends on understanding the government’s vision for the Suez Canal Area Development Project. Government efforts to encourage investment and establish an industrial city based around the automotive industry provide clues to the development of the sector as a whole.
In a telephone interview, Mustafa said the second Egypt Automotive Summit provides an opportunity to discuss the establishment of logistics and storage areas for international companies. There will also be discussions on how to benefit from the Jebel Ali port project in Dubai, which has become a centre for global trade, especially for automotive companies.
He said the Suez Canal Area Development Project provides great opportunities for investment, with lands and facilities available for development. The market, meanwhile, is waiting for the government to provide support and assistance for investment.
“We aim to implement automotive and component factories as part of the project, to be used for export,” he said. “These will attract foreign direct investment and partnerships with international companies.”
Indeed, the Suez development project is so central to the future of Egypt’s auto industry that Mustafa sees it as a “last chance” for the sector to take off.
The first auto summit, which took place last year, was the first to bring together government officials, investors and manufacturers for large-scale discussions on the sector’s future. This year’s event will be more focused on overcoming the challenges that hinder the sector, with the aim of meeting both local demand and export needs.
“The timing of the summit is critical. The government is now considering an automotive draft strategy,” Mustafa said. “This is the best time for the government to meet with sector leaders and get a clear sense and vision of reality.”
He believes the recommendations that result from this year’s event will be of importance to the government, with officials keen to incorporate the best suggestions into their draft strategy.
“The strategy’s primary objective should be to secure the best interests of consumers by providing high-quality through affordable local production,” he said.
The government needs to stimulate domestic manufacturing to increase production, he believes.
Mustafa hopes to see the government and investors agree on a “unified vision” for the automotive sector, in terms of the manufacturing process itself, trade and feeder industries.
Ambiguity regarding the situation for investors has led to problems in manufacturing, importing, and after-sales service, he claims.
“The challenges in the sector include a lack of a clear vision, which hinders direct investment and requires more production,” said Mustafa. “Moreover, it increases production costs and makes it difficult for investors to open new markets.”
In Mustafa’s vision of the future, the government should prioritise support for the national economy, because the growth of the market is the main factor in attracting investors.
Among the poor decisions taken recently, he says, was that of former governor of the Central Bank of Egypt, Hisham Ramez, to cap dollar deposits to $10,000 per day and a maximum of $50,000 per month.
Meanwhile, the indicative prices set by the Egyptian Customs Authority on vehicles have caused significant problems, obstructing the sector’s growth, he said.