Local 60% Component Equals Full Manufacturing, Says Automotive Traders Association

Mahmoud Hammad, Vice President of the Automotive Traders Association, said that reaching a local component ratio of 60% to 70% in car manufacturing is equivalent to full manufacturing according to global standards. He explained that this figure isn't just an ambitious target—it represents the real turning point for Egypt's economy. Hammad made these remarks during a TV interview, stressing that the Egyptian auto industry needs a realistic outlook, away from exaggeration.

Why No Single Country Builds a Car Alone

No country in the world manufactures a car with 100% local components. Hammad gave a clear example: global supply chains stretch across 20 to 30 countries, each providing parts and technologies. "No country makes a car on its own," he said. This interdependence isn't a weakness—it's the reality of modern industry. Egypt is moving within this framework, aiming to deepen local manufacturing instead of chasing an impossible goal.

Egyptian Buses: A Success Story to Repeat

Did you know Egypt has already achieved high local content ratios in bus manufacturing? Hammad revealed that the bus sector reached a local component ratio of 60% to 70%. The result was exports to the entire world. The experience proved that the Egyptian market can compete when the will and proper infrastructure exist. Success in buses offers a model that can be applied to passenger cars, but the road isn't paved with roses.

Engine and Gearbox: The Biggest Hurdle

Core components like the engine and transmission alone account for about 40% of a car's local component value. Hammad described this as the biggest challenge. "The engine and gearbox are the biggest challenge," he summed up. Add to that the wiring harness, glass. Electronic chips, and overcoming the engine and transmission hurdle opens unprecedented horizons for the national industry. Without these parts, the dream remains incomplete.

What Does 70% Local Content Mean for the Economy?

Achieving a 70% local component ratio means the Egyptian car will enter global markets with confidence. Hammad noted that this level gives the product a high competitive edge and real added value, opens export doors. Directly supports the national currency. "When we reach 70% local content, the Egyptian car will be globally competitive." Exporting isn't just an option—it's a necessity to turn the local industry into an engine of economic growth.

Government Efforts to Localize the Industry

There are serious government moves to localize car manufacturing in Egypt. Hammad pointed to encouraging global companies to set up local factories and develop local supply chains. The Egyptian market has an industrial base capable of absorbing this promising industry, but success requires time and massive investments. Looking at the bus experience, the road is long but possible.