Egypt Localizes Auto Parts: Al-Araby and Malben JV Targets 60% Local Content

Al-Araby Group signed a joint venture agreement with South Africa's Malben Engineering to manufacture automotive components in Egypt, aiming to raise local content in passenger cars from 45% to 60%. The deal was inked on the sidelines of the Africa Automotive Investment Forum in New Alamein, attended by Dr. Mohamed Farid Saleh, Minister of Investment and Foreign Trade, and Engineer Khaled Hashem, Minister of Industry. The partnership opens doors for local production of metal components and exports to African markets.

Khaled Saad: Boosting Local Content Is a Key Goal for Auto Manufacturing in Egypt

Khaled Saad, Secretary-General of the Egyptian Auto Manufacturers Association, said that new companies entering component production is one of the state's main objectives. He noted that local content currently stands at around 45% for passenger cars and 60% for commercial vehicles. The target is to push passenger car local content to 60% and commercial vehicle content from 60% to 80%. Reaching these targets requires more investment in automotive manufacturing and components.

50 Years of Metal Forming Expertise

The partnership combines Al-Araby Group's expertise in manufacturing, engineering. Technology with Malben Engineering's 50-plus years in producing and forming metal components for vehicles. The agreement seeks to develop automotive supply chains, increase local component production. Explore expansion into African markets. This collaboration strengthens Egypt's ability to attract new investment in the new car market.

Exporting to Africa: The Next Opportunity

Saad pointed out that the importance of these projects goes beyond meeting domestic demand. Higher local production of auto components can pave the way for export expansion. The African market offers a major opportunity for Egyptian-made products, especially with trade agreements facilitating access to the continent. Achieving 60% local content in passenger cars will reduce reliance on imports and lower production costs. That could positively impact car prices in Egypt's used car market in the coming years.

This move aligns with the state's strategy to localize the auto industry and cut the import bill. Higher local content means more jobs and stronger domestic supply chains. Yet the challenge remains in attracting enough investment to bridge the current gap, especially since some precision components are still imported. With new players like Malben entering, Egypt's chances of becoming a regional manufacturing hub serving Africa and the Middle East are rising.