Auto Division: Car Companies Raised Prices by 12% During War, Dollar Decline Calls for Reduction

The Deputy Head of the Auto Division at the Egyptian Chamber of Commerce, Alaa El-Sabaa, revealed that car manufacturers raised their prices by 8 to 12 percent during the recent war period, driven by the dollar's surge from EGP 47 to EGP 54 — a 14 percent increase. In a phone interview, El-Sabaa explained that companies absorbed part of the hike, with locally assembled cars rising by 8-9 percent and imported models climbing by 12 percent.

Dollar Decline Pressures Car Prices

El-Sabaa pointed out that ongoing negotiations, the dollar falling below EGP 50, and declining global oil prices are all factors pushing companies to cut prices by 4 to 5 percent. He warned that failing to adjust to these changes could lead to a severe market downturn, especially as consumers continue to face economic strain. The division official stressed that the market is at a critical juncture where price corrections are no longer optional but necessary.

Current Car Price Reality in Egypt

The Deputy Head noted that the price of an average car in Egypt now ranges between EGP 700,000 and EGP 800,000, describing this as a very high figure relative to purchasing power. He emphasized the importance of balancing consumer interests with the sustainability of factories and employment, urging companies to adapt to market conditions and reduce profit margins. The current pricing levels, he added, are pushing many potential buyers out of the market.

Used Car Market Booms as New Car Prices Soar

El-Sabaa confirmed that the used car market is thriving during periods of high new car prices, but he cautioned that this market follows the same economic cycle. Any decline in new car prices will directly impact used car values. He explained that Egyptian consumers are increasingly turning to more affordable alternatives, but the overall market remains interconnected and sensitive to broader economic shifts.

Call for Market Adaptation

El-Sabaa concluded by urging all stakeholders in the automotive sector to respond realistically to economic changes, stressing that a 4-5 percent price reduction is now essential to revive the market and stimulate demand. He noted that companies that adjust quickly to these new conditions will be best positioned to compete, especially with declining shipping costs and falling global raw material prices. The coming months, he said, will test the flexibility of both manufacturers and dealers.