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
100% Foreign
Private & Public
Ownership
Joint Ventures
Passenger Cars
Commercial Vehicles
Gorica Egypt
Automotive Eng. Co.
Rapid Growth
Vehicle Registrations
In thousands of Vehicles
15%
32%
42%
68%
262
228
-21%
21%250
206
172
121
72
2004 2005 2006 2007 2008 2009 2010
PC
Buses
Trucks
Projected
Source: AMIC Reports
Auto Components Industry in Egypt
The Egyptian automotive components production is
estimated at US$ 1.3 billion:
1. US$ 900 million serving the OE local
assembly and the aftermarket for 4.1 million
vehicles
Annual growth rate is 14.8%
Local 70%
2. US$400 million Exports
Over 90% of exports are destined to Europe
(OEM aftermarket)
Major Components & Customers
Electrical
Wiring
Harnesses
Tyres
Brake
Parts
Recent Developments
invested
US$ 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
Egypt
Footprint
Optimization
Manufacture & export wiring harnesses from Port Said
Software engineering. Started 50 engineers. Now 250
Toyota announced that it will start assembling
the Fortuner SUV in Egypt by early 2012
Economic Reforms
Growth in GDP
Untapped Potential !!
Unit
$ Billions
• GDP
%
• Average GDP growth
• Population (in millions)
$
• GDP per capita
Annual new vehicle
Thousands
• registrations
• Passenger Carparc
New Passenger Car
• Registrations
•
Passenger Car
penetration
2008 2009 2010 2011 2012 2013
161
173
181
190
202
216
7.2% 4.7% 5.4% 6.1% 7.1% 7.7%
80
83
84
86
87
89
2,013 2,079 2,142 2,221 2,319 2,443
2020
357
7.7%
99
3,593
261
206
250
365
451
541
1,053
2.1
2.2
2.3
2.5
2.7
2.9
5.4
Thousands 110
112
179
221
265
291
600
Car/1000
27
28
29
31
33
55
Millions
27
Turkey’ GDP per Capita is $5,000 and
its car penetration is 70
“1M2020”
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
Support Firm
level
competitiveness
improvement
programmes
Encouraging
local value
addition through
Automotive
Incentive
Scheme
Capitalising on the
portfolio of Free
Trade Agreements
•
•
•
•
•
•
GDP
Unit
2020
$ Billions
357
Average GDP growth
%
Population (in millions)
GDP per capita
Annual new vehicle
registrations
Locally Assembled
Vehicles for
Domestic Market
7.7%
99
$
000's
000's
•
Locally Assembled
Vehicles for Export *
000's
•
Total Local
Production
000's
* Factories producing more than 25,000 units
3,593
1,053
720
300
1020
What We Offer
 Competitive wages and salaries.
Labour HOURLY Wages*:
Low skill/ manual work
Semi-skilled
Skilled
Engineer MONTHLY Salary*:
€ 0.60
€ 0.75
€ 1.00
Junior Engineer
Senior Engineer
€ 350
€ 800
* Based on a survey conducted by EAFA/IDA on 20 auto component manufacturing companies.
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.
 Competitive cost of other factors of production.
What We Offer
• Strong Government support:
o Training
o Development of companies’ quality
systems and competitiveness
o 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 Offer
Proximity 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, Scandinavia
6 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