Auto Expert: Consumers Will Not Accept Continued Price Hikes as Dollar Declines

The Egyptian auto market is currently experiencing a noticeable state of stagnation, as consumers closely monitor price movements amid the declining dollar exchange rate, increased supply, and intensifying competition among dealers and distributors. In this context, Mahmoud Kheiry, an automotive market expert, stated that consumers are no longer willing to accept continued price increases, especially with the decline of the US dollar and relative improvement in economic conditions.

Rising Shipping Costs Pressure the Market

Kheiry explained, during a television interview, that rising shipping costs represent one of the most prominent challenges facing car manufacturers, importers, dealers, and distributors, particularly for vehicles coming from China, which now account for a significant share of demand in the Egyptian market. He pointed out that the cost of shipping a container from China has surged from approximately $3,500 to nearly $8,500, as a result of geopolitical tensions impacting maritime navigation and global supply chains.

European Cars Less Affected

The auto market expert noted that cars imported from Europe have not been affected to the same degree as imports from China, due to different shipping routes. Meanwhile, the Egyptian market is increasingly relying on Chinese cars across various segments, making any disruption in shipping from China directly impact supply and pricing.

Dollar Decline Shifts Customer Expectations

Kheiry confirmed that the decline in the dollar exchange rate and the stabilization of conditions with the continued truce have contributed to changing consumer expectations regarding car prices in the coming period. He indicated that there are economic forecasts suggesting the dollar could approach the EGP 47 level, which prompts customers to wait for real discounts rather than purchasing at current prices. He explained that consumers will no longer be convinced by justifications related to rising shipping costs, given the dollar's decline, and will consider it their right to receive discounts that reflect the improved exchange rate and changing import costs.

Stagnation to Persist Without Real Discounts

Kheiry predicted that the stagnation in the auto market will continue unless consumers feel actual and tangible price reductions, stressing that temporary offers or limited discounts may not be sufficient to stimulate demand. A large number of customers currently prefer to postpone purchasing decisions, waiting for the dollar direction to become clearer and for dealers to announce new price lists that align with current conditions.

Pressure on Dealers and Distributors

Kheiry explained that dealers and distributors are already facing pressures related to rising import and shipping costs, especially since part of the current inventory was contracted and imported at high shipping rates. However, the biggest challenge remains how to balance these high costs with consumer expectations of price reductions, amid the dollar's decline and increasing competition among different car brands in the Egyptian market.