Car sales in May 2017 fell by 45% compared to the same month of 2016. The market witnessed sales of 10,270 units versus 18,800 units, according to the report of the Automobile Information Board (AMIC).
The report showed that the demand for passenger cars fell by 48%, recording 7,100 vehicles, compared with 13,600 in May 2016.
Bus sales fell 45.4% to 1,022 in May, recording 1,873 in the corresponding month in 2016. Lorry sales fell by 36.1%, selling 2,143 lorries versus 3,356 lorries in 2016.
The decline in sales is due to the large price differential witnessed across the automotive market in recent months, especially since the beginning of 2017, when the price of cars doubled, which did not serve sales throughout that period, said Osama Abu Al Majd, head of the Car Dealers Association.
Khalid Saad, a member of the board of directors of the Bavarian Automotive Group and general manager of Brilliance Egypt, predicted the continuation of the decline in sales, especially after the Central Bank of Egypt’s (CBE) decision to increase the interest rate on deposits and loans by 2% came in favour of citizens who do not have direct investments in the local market; however, it does not support the investment movement, especially in the automotive sector.
In addition to that, 70% of the sector’s sales rely on the loans provided to customers, while only 30% of purchases rely on cash, according to Saad.
Saad also mentioned that the decision will backfire on car sales, as he explained that the customer who depends on loans does not have sufficient liquidity to pay in cash, so the number of customers will eventually decrease.
Meanwhile, car sales fell by 45.6% since the beginning of the year until May, recording 46,371 units sold by the end of May 2017, compared to 85,310 in 2016. Passenger cars sales also fell by 43.3% to record 33,143 units, compared to 58,477 vehicles the previous year, according to the AMIC report.
Moreover, the demand for locally assembled cars fell by 41.8% to 24,935 units from the beginning of the year until the end of May, compared to 42,863 units during the same period in 2016, while imports decreased by 49.5% , selling 21,436 vehicles compared to 42,447 cars in 2016.
Sales of locally assembled passenger cars fell 36.6% to 15,110 vehicles, versus 23,838 vehicles in 2016. Sales of imported passenger cars also fell 48.1%, selling 18,033 vehicles, compared to 34,739 vehicles the previous year.
Domestic bus sales fell 59.9%, selling 2,455 buses instead of the 6,115 units in 2016, while sales of imported buses decreased by 38.6% to record 2,581 buses, compared to 4,207 buses last year.
Domestic lorry sales decreased by 42.9% to 7,370, compared to 12,910 in the corresponding period of last year, while the sales of imported lorries decreased 76.5% to record 822 lorries sold during the first five months of this year, compared to 3,501 lorries during the same period of 2016.