Opportunities in the Automotive Industry in Egypt 1
Dec 16, 2015
Opportunities in the Automotive Industry in Egypt
1
Overview of Vehicle Production
Components Industry
Automotive Strategy “1M2020”
What Egypt has to Offer
Vehicle Assemblers in Egypt
Egyptian
Companies Private
& Public
Joint Ventures100%
Foreign
Ownership
Gorica Egypt
Automotive Eng. Co.
Passenger Cars
Commercial Vehicles
Rapid GrowthVehicle Registrations
2004 2005 2006 2007 2008 2009 2010PC Buses Trucks
72
121
172
262
In thousands of Vehicles
Source: AMIC Reports
68%
42%
32% 228206
25015%
-21% 21%
Projected
1. US$ 900 million serving the OE local
assembly and the aftermarket for 4.1
million vehicles
Annual growth rate is 14.8%
2. US$400 million Exports
Over 90% of exports are destined to
Europe (OEM aftermarket)
The Egyptian automotive components
production is estimated at US$ 1.3 billion:
Auto Components Industry in Egypt
Local 70%
Major Components & Customers
Electrical Wiring
Harnesses
Tyres
Brake Parts
Recent Developments
Egypt
invested US$ 100
million in a wholly owned
facility to produce Sunny & Pickup trucks
Egypt was the first country to assemble the
S-class outside Germany
Sabanci with Lasheen invested more than US$ 30 million to build
1000 coaches per annum
US$ 50 million to build 1,500
coaches
Pirelli invested US$ 65 million to increase Truck Tyre capacity by 50%
GM Egypt added state-of-the-art paint line with an investment of US$32 million. Yr 2007 to Yr 2009 CAPEX over US$ 75 million
Footprint Optimization
Manufacture & export wiring harnesses from Port Said
Toyota announced that it will start assembling the Fortuner SUV in Egypt by early 2012
Software engineering. Started 50 engineers. Now 250
Economic Reforms Growth in GDP
2020357
7.7%99
3,593
1,053
5.4
600
55
Unit 2008 2009 2010 2011 2012 2013
• GDP $ Billions 161 173 181 190 202 216
• Average GDP growth % 7.2% 4.7% 5.4% 6.1% 7.1% 7.7%
• Population (in millions) 80 83 84 86 87 89
• GDP per capita $ 2,013 2,079 2,142 2,221 2,319 2,443
• Annual new vehicle registrations
Thousands 261 206 250 365 451 541
• Passenger Carparc Millions 2.1 2.2 2.3 2.5 2.7 2.9
• New Passenger Car Registrations
Thousands 110 112 179 221 265 291
• Passenger Car penetration
Car/1000 27 27 28 29 31 33
Turkey’ GDP per Capita is $5,000 and its car penetration is 70
Untapped Potential !!
“1M2020”Unit
• GDP $ Billions
• Average GDP growth %
• Population (in millions)
• GDP per capita $
• Annual new vehicle registrations
000's
•Locally Assembled
Vehicles for Domestic Market
000's
• Locally Assembled Vehicles for Export *
000's
• Total Local Production
000's
* Factories producing more than 25,000 units
2020
357
7.7%
99
3,593
1,053
720
300
1020
Vision 2020: Stimulate expansion of automotive vehicle production to 1.0 million vehicles per annum by 2020.Strategy based on 4 Key pillars:
Adherence to International (UN ECE)
homologation Standards
Capitalising on the portfolio of Free
Trade Agreements
Encouraging local value
addition through Automotive Incentive Scheme
Support Firm level
competitiveness improvement programmes
Competitive wages and salaries.
What We Offer
Labour HOURLY Wages*:
Low skill/ manual work € 0.60 Semi-skilled € 0.75 Skilled € 1.00
Engineer MONTHLY Salary*:
Junior Engineer € 350Senior Engineer € 800
* Based on a survey conducted by EAFA/IDA on 20 auto component manufacturing companies.
Competitive cost of other factors of production.
Under good management and with proper training, the work force exhibits adherence to a good work ethic, very low absenteeism and commitment to achieving agreed KPIs.
What We Offer
• Strong Government support:o Trainingo Development of companies’ quality
systems and competitivenesso Export Tax Rebate
• Regional Trade Agreements e.g. COMESA, AFTA, Aghadir, Mercosur
• Exemption from Turkish and European Union customs duties for Egyptian exports
What We OfferProximity to a big market in Europe
OEM: annual Vehicle Production > 20 million vehicles Aftermarket: replacement parts for > 250 million vehicles values
at Euro 44 billion per annum
10 days shipping to UK, Scandinavia6 days to Italy, Spain, France
Low cost of shipping to Europe
Using the new 2010 RORO line, transit time is reduced to 5.5 days to UK and 4.5 days to France
THANK YOU