Return of Mercedes

CAIRO - 17 February 2019: Mercedes Benz has decided to resume assembling vehicles in Egypt in collaboration with a local partner. The Ministry of Industry, Trade, and Small Industries will form a technical task force to follow up on the project’s execution.

Egyptian Ambassador to Germany Badr Abdel Aty stated that Mercedes is mulling establishing a factory for automotive feeding industries in Egypt as part of its plan to expand investments in the country.

President and CEO of Mercedes-Benz Egypt Thomas Zorn praised the attention the Egyptian government is giving the automotive industry, as well as its encouragement of international companies to operate in the Egyptian market. Zorn affirmed that the new policies adopted by the government have contributed to clarifying the vision of international automotive producers.

Earlier in January, a ministerial committee in charge of settling investment disputes resolved a dispute worth LE 700 million on the value of vehicles between the Customs Authority and a Mercedes Benz importer.
In his meeting with Member of the Divisional board and Head of the Production Department at Mercedes-Benz Markus Schäfer, President Abdel Fatah al-Sisi raised the matter of establishing a partnership with the company to manufacture self-driving cars to be used in the cities that are currently under construction, particularly as the New Administrative Capital. The president added that he looked forward to cooperate in manufacturing different models of electric vehicles.

Secretary General of the Egyptian Automobile Manufacturers Association (EAMA) Khaled Said stated that Mercedes customers represent 7% of the local automotive market.

Chairman of the Industrial Committee in Parliament Farag Amer suggested that Mercedes’ decision would attract more investments, particularly to the SCzone.

Chairman of the Suez Canal Authority Mohab Mamish said in a press conference held in September 2017 that 96,000 square meters had been allocated for Mercedes Benz in SCzone to establish an assembly plant and an automotive feeding industries factory.

Mercedes Benz ranks 13th on the Forbes list of most valuable brands in 2018, with sales hitting $116.9 billion worldwide. The brand value is $34.4 billion, and the company hires 167,921 employees at current.

The company exited the Egyptian market in April 2015 and issued a statement pointing out that the the General Agreement on Tariffs and Trade (GATT) was the main reason because tariffs were gradually decreasing until they hit zero.

Mercedes entered the Egyptian market in 1996 through a partnership that gave rise to The Egyptian German Automotive Company (EGA). The goal of the venture with Sami Saad Investments was to assemble Mercedes Benz vehicles in Egypt and export to other countries.

According to a statement by Mercedes Benz, the company secures 1,000 direct and indirect jobs in the country. The statement added that talks with the president covered infrastructure projects with the government. The company offered to provide its services pertinent to electric transportation, electric cars, and self-driving cars in the New Administrative Capital, and the smart cities under construction. The statement indicated that negotiations on those projects’ details are underway.

In December, Mercedes Benz had to cut the prices of its vehicles exported to China and manufactured in the United States due to the rise in tariffs. The decision is valid until March 21 and applicable to four models with discounts ranging between 36,000 yuan ($5,220) and 135,000 yuan ($19,286), according to Reuters.

Egypt is the third largest trade partner to Germany in the Middle East. In his meeting with the president in Cairo this month, the Federal Minister for Economic Affairs and Energy Peter Altmaier expressed his happiness for launching a project to establish the German International University for Applied Sciences in the New Capital. The university will encompass a coalition of top 10 German universities in the field.

The minister was chairing a delegation consisting of parliamentarians, and representatives of top German firms. Altmaier praised the growth of Egyptian-German economic and trade ties, particularly in the energy sector.