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1) What is Egypt’s Macro-economic indicators?
- Current GDP at 5.5 Trillion EGP.
- Projected average annual growth rate of real GDP for the next 5 years at 4.8%.
- $7.58Bn net FDI investment flows, the highest recipient in Africa and second in Arab Countries.
- 89% private consumption component of GDP.
- Massive consumer market with 102M population with growth rate of 1.58%.
- Net international reserves of $40.98B increasing from $16.48B in January 2016.
- $47.9B Exports of Goods and services with potential increase.
- A massive workforce with the lowest minimum wage value of $126.92 per month boasting a large, young, well-trained and highly competitive labor force of around 29.1 million (more than 31% of the total Egyptian population).
- Unemployment rate decreased from 12.5% to 9.1% throughout FY2016/22
What are the infrastructural & Utility Advantages?
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- Idealistic networking infrastructure.
- Total roads network of almost 194k km.
- Fully connected railways over 9.5 km of Range.
- 15 Commercial Ports and 27 Airports.
- High-Speed electrical train with length of 460 km with connecting: Ain al Sokhna with Alexandria through Cairo, New Administrative Capital, Giza, New Alamein and 6th of October
- The Monorail project, with a total of 35 stations connecting both ends of Egypt centralizing at the New Administrative Capital.
- 11 Dry-ports & logistic centers.
- Competitive electricity price at $034 cent per kWh.
- Low-priced resources where $0.54 cent per liter of gasoline and $0.47 cent for diesel.
2) Egypt’s outlook on sustainable energy:
- Even though a safe reserve of electric energy has been provided, as the total electric energy generated during year 2020/21 was 183.246 million kWh and total used was about 20.825 million Egypt still intends to divert to clean energy usage through;
- Diversifying Energy Sources with increasing electricity from sustainable energy to 42% by 2035
- According to the 2035 Strategy, Egypt’s Initiative to Go Green with an outlook to use Hydrogen as a power source will aid significantly in maintaining a non-polluting, energy-efficient environment.
3) Why is the Suez Canal Zone the right geographical location for Manufacturing Industries?
- Built over a massive landbank of 461 million sqm.
- Existing ecosystem and quick market access.
- Accessibility to 6 seaports and 2 airports.
- Strong cost competitiveness for manufacturing.
- One-stop shop offering but not limited to:
- Single point of contact for tenants.
- Quick registration and licensing process.
- Integrated digitized setups for key processes.
- Attractive financial incentives for investors.
- A road network extending regionally throughout Africa.
- Superior connectivity to Major trading routes serving most of the global trade where:
- 20% of the international container trade
- 10% of seaborne trade
- 000 ships passing through each year
- Investors at Suez Canal Zone are eligible to the benefits of Free Trade Agreements Egypt including (GAFTA, COMESA, Agadir, EPA, MERCOSUR, FTAA and more)
- 100% Foreign Ownership of the Project.
4) What are incentives provided to promote the industry?
0% Custom Tax on:
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- All project required material and tools imported from abroad
- Re-exports
- Applied within the economic zone, when importing from local market or abroad into economic Zone.
- Competitive prices for facilitations in paying for energy used.
- Reimbursing the value of connecting utilities.
5) Why Choose El Sokhna 360 as a destination?
- First fully-integrated industrial city over 10 million sqm.
- Built for a more sustainable, eco-friendly approach.
- Located at major trading routes:
- On the banks of newly-expanded Suez Canal.
- Global trading hub at the crossroads of Africa, Europe and Asia.
- Immediate access to canals and seaports.
- 100 km to New Capital and 150 to Cairo Airport.
- Strategically developed to cover:
- Production and manufacturing zones.
- Logistic and warehousing zones.
- Workforce housing.
- Commercial and Leisure –
- Education zones to include technical academies & universities
- Direct access to European, Egyptian, Asian and MENA Region consumers.
- 100%-:
- Foreign ownership of companies.
- Foreign control of import/export activities.
- Exemption from custom duties & sales tax.
6) What is Egypt’s outlook on the automotive industry?
Egypt has recorded a successful increase by 2.5% in the production of cars for year 2021 and the production of passenger cars expects an increase by 3.1% and commercial cars by 2.2%. This is due to the strategic plans set by the Egyptian government, which will attract car manufacturers to establish their production operations in the country.
7) How will Egypt support the automotive industry?
- The Egyptian government seeks, within the framework of its proactive policy and long-term vision, to make the automotive sector a major sector in Egypt's economy and one of the elements for increasing both local manufacturing and exports.
- The Egyptian government aims, within the framework of its car manufacturing strategy, to produce about half a million cars annually, with one hundred thousand cars being exported annually with an increase in the proportion of the local component in manufacturing operations.
- The transition to the electric car industry, which has become a strategic trend worldwide now and has many advantages, among which is the shift to dependence on clean energy, and working on preparing the infrastructure necessary to provide stations to charge this type of cars
- The manufacturing of industrial production machines with automatic digital control technology, to leap in the field of local manufacturing, and possess technological capacity in the digital industry, including production lines based on artificial intelligence and information technology.
- The Export Burdens Refund Program:
- The Ministry of Commerce and Industry has activated the "Export Burdens Refund" program as of July 2021, whereby companies operating in the automotive industries can benefit from the Automotive Sector Export Support Program, for a period of 7 years, additional incentives include:
- 50% additional support for exports to the African market and a discount of up to 80% on shipping fees.
- 2% additional support for Egyptian-branded exports.
- The monetary incentive to support the purchase of electric cars
- The Egyptian government has provided a cash incentive to support the purchase of electric cars, amounting to 50,000 pounds, deducted from the price of the car, and provided to the factory so that it can produce efficiently.
- Work is also underway to establish public charging stations for commercial vehicles such as taxis, through the establishment of 3,000 stations serving 6,000 in 4 governorates, and on all highways in Egypt.
- The Ministry of Commerce and Industry has activated the "Export Burdens Refund" program as of July 2021, whereby companies operating in the automotive industries can benefit from the Automotive Sector Export Support Program, for a period of 7 years, additional incentives include:
8) Key Performance Indicators:
- The Evolution of Cars Sales:
Egypt witnessed an increase in the commercial vehicle sales by 19.7% during the year 2022.
1) Commercial Vehicle Sales:
Egypt witnessed a 5.7% increase in commercial vehicle sales during 2020
- The total number of buses in Egypt is expected to represent an increase of 17.4%, which reflects the expected positive role of the bus sector and the growing potential of electric buses in the market.
2) Passenger Vehicle Sales:
Egypt witnessed a 13% increase in passenger car sales during 2021.
- Passenger car sales increased by 58.2% in the first quarter of 2020 year-on-year to reach 37,011 units, compared to 23,402 units during the first quarter of 2019, because of the recently increased demand for car purchases
- Passenger car sales are expected to increase by 1.3%
3) Import/Export Ratios:
The total volume of passenger car imports amounted to about $2.4billion, while the total volume of passenger car exports amounted to about $12.9 million during FY2020/2021
9) What makes the automotive industry trading profitable especially in Egypt?
- Proximity to Global Markets
- Located on key international logistics routes feeding the market of Europe, North America, Asia and the Middle East.
- The existing market gap in Automotive sector, the Spare Parts Sector, the feeding industries and the high demand on tires.
- Many integrated strategies focusing on the development of the automotive sector, which include supports to manufacturing EVs and a support for the consumer in purchasing automobiles.
10) What types of Investments are profitable in Egypt?
- In the Automotive industry, any type of manufacturing, it being line production of cars, Spare Parts or tires will be very profitable as previously mentioned, Egypt’s presence in the manufacturing is very little and has only been focusing on assembly, therefor the number of imported sub spare components for this Sector sum up to 37.023.593 Imported units at a cost of $207,259,160 just for FY2021.
- In Addition to that the Tire Market is in high demand as:
- Egypt’s Tire Market accommodates 2.4 million Tires yearly.
- The expected yearly growth of 3.4% of sales and strategic aim for manufacturing raises the market need of Tires.
- Egypt recorded a $465M of Imports in Tires.
- The Egyptian Tire Market Segmentation:
- Light Commercial Vehicles
- Medium & Heavy Commercial Vehicles
- Two Wheelers
- Off the Road Vehicles
- The Demand on OEM and replacement
- The lack of competition making local production and international export profitable.
- In Addition to that the Tire Market is in high demand as: