3 MAJOR AGREEMENTS SPARK EGYPT'S AUTO INDUSTRY REVOLUTION

•  “Ez Al Suwaidi Automobiles" company " will make Malaysian Proton cars with a production capacity of up to 50 thousand cars.
• "Itamco" and " GB Auto Egypt" invest 2 billion EGP in a factory in El-Sadat city and production of up to 100 thousand units.
• The Prime Minister witnesses the signing of the agreements and emphasizes the government's interest in the development and improvement of the automotive industry in Egypt.

Dr. Mostafa Madbouly, Prime Minister, today, at the Cabinet Headquarters in the New Administrative Capital, witnessed the signing of 3 framework agreements for automotive manufacturing in Egypt between three government parties: “The General Authority for Investment and Free Zones,” The “Environmentally Friendly Automotive Industry Finance Fund” affiliated with the Ministry of Finance, the “Automotive Industry Unit” affiliated with the Ministry of Trade and Industry, and 3 companies specialized in the field of local car assembly, namely “Ezz Al-Sewaidi Automotive Factories” and “International Trade, Marketing and Commercial Agencies” - Itamco, and the Egyptian Company for Manufacturing Means of Transportation - Ghabbour Egypt.

In a special statement, Dr. Mostafa Madbouly said: "The three agreements come in the light of the Government's interest in the development of the automotive industry in Egypt, especially environmentally friendly cars. The promulgation of Law No. 162 of 2022 establishes the Supreme Council for Automotive Industry and the Fund for Financing the Environmentally Friendly Automotive Industry. The aim is to develop Egypt's automotive industry and increase the resources needed to finance the environmentally friendly automotive industry. This includes machinery vehicles that do not produce emissions or adverse effects on the environment. Also, those that produce less harmful effects of emissions on the environment than vehicles using fossil fuels by regulated emission standards. The development of resources to finance the environmentally friendly automobile industry is crucial. It involves vehicles that do not produce emissions or adverse impacts on the environment. Moreover, those that produce less harmful effects or emissions on the environment than vehicles using fossil fuels in accordance with regulated emission standards."

The Prime Minister added that this cooperation also comes under the "AIDP", an integrated and comprehensive automotive and nutritious industry policy that provides a stable system that complies with all international commitments. It relies primarily on the private sector as an engine of the development process, while the Government provides an enabling environment to promote the long-term prosperity of the automotive industry by linking it with the global production and trade system.

The three parties to the framework agreements agreed to cooperate to achieve the objectives of the AIDP National Automotive Industry Development Programme and in the light of the Fund's procedural governance.

It should be noted that the signing of framework agreements coincides with the actual launch of the electronic platform of the National Automotive Industry Development Programme.

Mr. Husam Haiba, Chief Executive Officer of the General Authority for Investment and Free Zones, said that the Authority's obligations were to coordinate with "The Supreme Automotive Council" in the formulation and approval of public policies, plans and strategies necessary for the development of the automotive industry in Egypt in line with the general policy of the State and follow-up on its implementation. In addition to coordinating with the Supreme Council for Automotive Industry and all other relevant entities in developing the general framework for the legislative and administrative reform of the automotive industry to create an attractive climate for the automotive industry and coordination and follow-up with the General Authority for the Economic Zone of the Suez Canal on procedures for the rehabilitation of the industrial zone in East Port Said. The scheme is equipped with the RO-RO dock at East Port Said Hub Port to provide infrastructure that allows automakers to be in specialized industrial complexes with a suitable range of suppliers and service providers.

He added that the authority commitments also include coordinating with government agencies that intend to update and replace their vehicles by purchasing local cars from certified- production manufacturing companies.in addition to following up with stakeholders to complement infrastructure and meteorology to support the proliferation of electric vehicles; Promoting investment opportunities in the automotive industry, attracting foreign investment and industrial developers for the target area and giving all investment incentives available in Investment Law No. 72 of 2017 to companies engaged in automobile manufacturing, components and engineering services, including research and development centers, inspection plants and automotive software development centers.

Meanwhile, Mr. Al-Shahat Ghattouri, Head of Customs, said that The "Green Automotive Industry Finance Fund" is a fund established by the Ministry of Finance to finance and support the environmentally friendly automotive industry. It is committed to preparing and automating the procedural cycle of the National Automotive Industry Development Program and applying the calculation of the motivation due to the acceding manufacturer as determined by the program "Automotive Unit" of the Ministry of Commerce and Industry based on four criteria: Value added locally, annual volume of production, value of new investments and environmental compatibility of the vehicle's engine (emission level).”

He added “The incentive due in the form of a coupon is granted every three months from the due date  by the requirements and controls of the National Automotive Industry Development Programme, and the beneficiary's coupons are used in government settlements. These commitments shall continue throughout the seven-year duration of the National Automotive Industry Development Programme and shall be reviewed during the sixth year to decide whether to relaunch or discontinue it."

The framework agreements unconditionally bound the three companies to the rules and conditions of the program. It obliged them to obtain the approval of the Automotive Unit as an "accredited assembly company" formally in accordance with specific terms and procedures. The agreements also obliged companies to disclose all documents necessary to calculate the incentive by the Automotive Unit or the Environmental Friendly Automotive Industry Finance Fund.

On the sidelines of the signing, Mr. Abdelrahman Sultan, CEO of Ez Al Suwaidi Automotive Factories, said that Egypt's automotive industry is experiencing serious government moves to expand domestic production. He stated “This partnership is an important step to support the Egyptian market. Izz Al-Suwaidi factories" investment exceeds $ 15 million, with a production capacity of up to 50 thousand cars in the coming years, as the company works to produce conventional fuel cars and electric cars for the domestic market as well as export to other countries which will start immediately with the start of production.”

This project is one of the largest projects in the automotive industry in Egypt, where it will start manufacturing Malaysian Proton cars in the "factories of Ez Al Suwaidi". According to the manufacturing contract, the car will be produced in Egypt at competitive prices, to contribute to the introduction of a car to the Egyptian market at suitable prices for citizens as well as exporting to various countries around the world.

Photo Source: Lenny Kuhne on Unsplash