Skip to main content

Egypt aims to localize car industry with Emirati support

Egypt is trying its best to deliver its plan to localize the automobile industry, as it cooperates with Abu Dhabi to produce and manufacture a specific car in Egyptian factories to meet the needs of the Egyptian local market on the one hand and export it to African countries on the other.
An Egyptian worker assembles car doors at a BMW factory, 6th of October City, Egypt, May 29, 2011.

As part of Egypt’s insistence on supporting and delivering its plan to localize the automobile industry, the Egyptian Ministry of Military Production held talks Dec. 16 with the Emirati M Glory Holding specializing in car manufacturing to discuss the manufacture of Egyptian-made cars.

Egyptian Minister of Military Production Mohamed Ahmed Morsi said in a statement Dec. 16, “Cooperation with the United Arab Emirates [UAE] aims at rolling out a plan to localize modern technologies in the automobile industry. An Egyptian-Emirati company has been established in this vein to have Egyptian laborers produce and manufacture bi-fuel cars, and this is a first in Egypt.”

Morsi continued, “Such cooperation supports the ambitious and unprecedented plan to expand the use of natural gas for cars and to benefit from the recent availability and discovery of gas in Egypt.”

In statements Dec. 16, Magda al-Azazi, chairman of the board of directors of the Emirati M Glory Holding, said, “Cooperation with Egypt aims to meet the local and African need for pickup cars, i.e., transport vehicles, especially those that run on natural gas and gasoline.”

She noted, “These cars offer many advantages, as they have the highest engine capacity for pickup cars in the market. They have comfortable seats, strong air conditioning and high-tech safety features. They also operate in temperatures suitable for the Middle East, the Gulf and Africa. In addition, they can operate on various types of roads, which facilitates their export to Africa."

Azazi continued, “Cooperation with Egypt in the production of vehicles also aims at producing cars that are more environmentally friendly in order to reduce pollution.”

On Aug. 9, the Egyptian Ministry of Military Production announced along with the Emirati company the establishment of an Egyptian-Emirati automotive industry company under the name EM to produce cars that run on natural gas and gasoline in Egypt.

The new company is aiming for a production capacity of 12,000 cars annually in order to meet the needs of the Egyptian and African markets, with production scheduled to start in the first half of 2022. Also, the company is set to deploy 20 factories for this purpose.

In March 2020, Egypt launched the national strategy for the localization of the vehicle and fuel industries in Egypt. President Abdel Fattah al-Sisi instructed the government to start rolling out the strategy of locally manufactured cars that operate on new energy sources such as natural gas and electricity as an alternative to traditional fuels.

On Dec. 22, Egyptian Prime Minister Mustafa Madbouly said, “The state has a strong interest in supporting the automobile industry and its affiliated industries in Egypt, and the government is fully ready to provide all possible means of support to building serious partnerships with any entities and companies capable of supporting the automobile field in Egypt.”

The Egyptian government is trying to provide incentives for international companies specialized in the automotive industry to invest in Egypt and support Cairo’s plan to localize the industry. On Dec. 21, Finance Minister Mohamed Maait said, “There are presidential orders to study and approve incentive packages to localize strategic industries such as the automobile industry, especially electric cars, so as to contribute to maximizing our output, expand our export base and enhance the competitiveness of Egyptian products in global markets.”

There have been ongoing Egyptian efforts aimed at encouraging private sector companies to support the state’s plan to localize the automotive industry, especially electric cars. On Dec. 21, Madbouly met with representatives of General Motors and Mansour Automotive Group to discuss their plan to manufacture the proposed electric car in Egypt.

Nour el-Din Darwish, vice president of the Automotive Division of the Egyptian Chamber of Commerce, told Al-Monitor, “The state is adamant to localize the automobile industry by encouraging partnerships with major economic entities or countries.”

He said, “Localizing the automobile industry will pave the way for new job opportunities and will enable Egypt to export such cars to African countries.”

Darwish noted, “Egyptian-Emirati cooperation in the transport vehicle industry allows covering the needs of the local market, especially considering that transport vehicle sales in Egypt are high.”

He added, “Egypt is looking to produce environmentally friendly cars, such as electric cars and cars that run on natural gas because in the coming period the use of gasoline, which harms the environment, will decline globally.”

Hussein Mustafa, former executive director of the Automobile Manufacturers Association, told Al-Monitor, "The Emirati-Egyptian cooperation in the automotive manufacturing field in Egypt aims to expand exports to the continent of Africa.”

He pointed out that “this car has a competitive advantage that makes it being sold in Africa at low prices and helps it compete with any other car. Egypt is a signatory to the COMESA agreement, which imposes lifting customs duties on Egyptian exports to Africa, thus contributing to offering them to African countries at low prices.”

COMESA is a joint agreement among the countries of eastern and southern Africa, and it includes lifting customs duties on imports and exports between the signatory countries.

Twenty-one countries signed the COMESA agreement, namely Egypt, the Democratic Republic of the Congo, Comoros, Burundi, Eritrea, Djibouti, Kenya, Ethiopia, Eswatini (Swaziland), Malawi, Madagascar, Libya, Seychelles, Rwanda, Mauritius, Tunisia, Sudan, Somalia, Zimbabwe, Zambia and Uganda.

Mustafa noted, “The new car also has competitive advantages that help it spread in African countries. Chief among these is that it is a fuel-saving car that is suitable for Africa’s hot weather and equipped with strong air conditioning. The car can also travel on unpaved roads.”

He concluded, “The cooperation between the Ministry of Military Production and the UAE stems from the fact that the ministry owns several factories and production lines that allow the speedy start of the manufacturing process.”