Dealers Association Warns: Car Prices Expected to Rise Despite Dollar Decline

In a development that raises many questions among consumers and market observers, Egypt's Car Dealers Association has issued a clear warning that the recent decline of the US dollar below the 50 EGP threshold for the first time in months does not necessarily mean an imminent drop in local car prices. Osama Abu El Magd, head of the association, stated that the automotive market is influenced by a complex set of factors and not solely by the exchange rate of the greenback.

Pricing Factors Go Beyond the Dollar Rate

Abu El Magd explained that car pricing in the Egyptian market depends on several interrelated elements, including shipping and insurance costs, global car prices in the country of origin, the availability of supply and the stability of global supply chains, in addition to import regulations. He pointed out that all these factors combined determine the final price paid by the consumer, not just the dollar price. This explains why prices have not dropped despite the noticeable decline in the US currency's value.

The "ASN Number" File and Its Impact on Competition

The association's head revealed the most pressing issue currently facing the market, which is the continued restriction of the "ASN Number" (Automated System Number) to official brand agents only, excluding independent import companies. Abu El Magd confirmed that this situation leads to a lack of real competition within the market, where a single entity or a limited number of players control the volume of supply and pricing. This relative monopoly negatively impacts the end consumer, who faces limited options and prices that do not necessarily reflect natural supply and demand forces.

Expectations of Continued Price Pressure Until Q3

Abu El Magd's warning extended to future expectations, as he predicted that price pressures within the Egyptian car market would continue in the coming period. He emphasized that prices may witness new increases at least until the end of the third quarter of this year, given the continuation of current import conditions and declining competition levels. He stressed that a dollar decline alone will not be sufficient to cause tangible price reductions unless it is accompanied by a real improvement in other market-affecting factors.

The Solution Lies in Opening Imports to All

The head of the Car Dealers Association presented a clear roadmap to overcome this crisis, confirming that opening the door for imports to all qualified parties—whether official agents, independent import companies, or authorized dealers—would create a healthy competitive environment in the Egyptian market. He explained that increasing the number of importers would lead to a diversification of supply and multiple sources for obtaining cars, which would ultimately reflect positively on prices, giving consumers more choices and better opportunities to purchase at more competitive rates.