Egypt Announces New Incentives to Localize Auto Industry and Attract German Companies

Egypt's Minister of Industry, Khaled Hachim, announced that the National Automotive Industry Development Program is a key pillar for attracting major global brands to the Egyptian market. The announcement came during a roundtable hosted by the ministry for German industrial companies, attended by Jürgen Scholz, Germany's ambassador to Egypt, and Mostafa El-Bagoury, head of the German-Arab Chamber of Industry and Commerce. The message is clear.

Incentives Linked to Local Content

The investment incentives offered by the automotive industry program are directly tied to increasing local content and localizing feeder industries and supply chains. The more local content an investor uses, the greater the benefits—whether for conventional or electric vehicles.

New Investments in Tires and Batteries

Recent months have seen new investments from global companies in Egypt, covering tire manufacturing, EV batteries, and production lines. The ministry is also running a program to develop local suppliers and boost their efficiency, with incentives encouraging major companies to qualify suppliers and integrate them into global supply chains. The numbers haven't been disclosed yet.

'Qeema' Certificate to Evaluate Factories

The ministry is introducing a 'Qeema' certificate to assess industrial facilities. This certificate links benefits and incentives to factories' efforts in increasing local content, deepening manufacturing, developing suppliers, investing in technology and R&D, and hiring and training workers.

What It Means for the Egyptian Car Market

In the medium term, these incentives could lower local production costs, impacting car prices in the Egyptian market. They may also attract major German brands like Volkswagen, BMW. Mercedes to expand local manufacturing. Competition will heat up.

The Egyptian government has sought to localize car manufacturing for years, but challenges related to supply chains and technology persist. These new incentives may be the most serious step yet.