By Edmund Bower
October 31, 2024, 10:39 AM
In a significant move, global car manufacturers are ramping up operations in Egypt following the resolution of a prolonged currency crisis earlier this year. The devaluation of the Egyptian pound in March has not only enhanced the country’s appeal as a consumer market but has also positioned it as a key export base.
Japanese automaker Nissan, which currently produces the Sunny model in Egypt, has announced plans to introduce a new model by year-end. Approximately 60% of the Sunnys manufactured in Egypt are sold domestically, while the remainder are exported, with Nissan having shipped over 15,000 units in the last two years. Mohamed AbdelSamad, managing director of Nissan Egypt, emphasized the company’s commitment to leveraging Egypt’s strategic location for expanding its footprint across Africa.
In line with these developments, Nissan is investing in its factory in Sixth of October City, aiming to make it the first solar-powered automotive facility in the country.
Stellantis, formed from the merger of Fiat Chrysler and Peugeot, is also expanding its presence in Egypt. The company recently announced plans to assemble Jeep Grand Cherokees, with expectations to introduce a second model in 2025. Samir Cherfan, Stellantis’s COO for the Middle East and Africa, highlighted that these investments were made possible by the currency devaluation, which he believes opens up considerable market potential.
Despite facing challenges such as the limitations of local suppliers and concerns over potential government budget cuts affecting export subsidies, both Nissan and Stellantis express confidence in Egypt’s automotive market. The Egyptian government is supporting local manufacturing with initiatives that include plans for three new automobile parts factories, aimed at bolstering the supply chain.
As car manufacturers look to capitalize on Egypt’s growing population of over 106 million and its lower cost of living compared to neighboring countries, the potential for growth in the automotive sector appears promising. However, industry leaders acknowledge the inherent risks, including the possibility of another currency crisis.
Cherfan stated, “Egypt is a great country with great resources that should give good odds for the future,” while emphasizing the need for stability and development in the manufacturing sector to compete effectively with more established markets like Turkey and Morocco.
With renewed investment and expansion plans, the future of Egypt’s automotive industry looks increasingly bright, provided that current conditions remain stable.
