Cairo: The Ministry of Industry has announced the launch of the National Program for the Development of the Automotive Industry, aiming to establish a robust and competitive industrial foundation for the automotive sector in Egypt. The initiative is designed to create a globally appealing and stable investment environment, which will facilitate the localization of vehicle manufacturing and attract major international companies, thereby deepening local industrialization.
According to State Information Service Egypt, the program is set to enhance economic viability by promoting production at an economically efficient scale, thereby reducing costs and boosting competitiveness. It aims to support the trade balance by lowering the import bill for vehicles and components while simultaneously increasing Egypt's automobile exports.
The ministry's statement outlines goals such as raising the local value added to 60% and increasing the targeted local industrial component in vehicle manufacturing to over 35%. Additionally, the program targets an annual production volume of 100,000 vehicles, attracting investments in the automotive sector, and encouraging a shift towards electric and environmentally friendly vehicles.
To qualify for the program's incentives, manufacturers are required to produce a minimum of 10,000 vehicles annually, with at least 5,000 units per model, increasing yearly. The targeted local industrial component for fossil-fuel vehicles must start at no less than 20%, reaching 35% by the program's conclusion. For electric vehicles, initial production must be at least 1,000 units, increasing to 7,000 units by the program's end, with an initial local industrial component of at least 10%, subject to annual review.
The statement further specifies that electric vehicles are eligible for half the value of the added-value and production-volume incentives, while investment and environmental incentives apply in full. The maximum vehicle price eligible for incentives is set at EGP 1,250,000, with a maximum engine capacity of 1,600 cc. The total incentive value cannot exceed 30% of the ex-factory price, capped at EGP 150,000 per vehicle.