Market recession keeps car imports in decline: dealers

CAIRO – 21 August 2017: Recession in the car market sales and volatile custom dollar exchange rate have led to the continuing decline in car imports, Head of Car Dealers Association Hussein Mostafa said.

Low volume of sales prompted car dealing companies to resort to issuing discounts, “but still, this was not a sufficient solution to revive the market,” Mostafa told Egypt Today.
Sales of locally-assembled cars hiked 51 percent in the first half (H1) of 2017, compared to H1 2016, Mostafa added.

“Progress of the car market is linked to economic growth, an increase in the national income, return of tourism and influx of investments,” the Head said, adding that this is expected to happen in 2018 when Egypt starts exporting gas from giant Mediterranean field Zohr.

The latest decisions by the Central Bank of Egypt (CBE) to raise interest rates by a total of four percent also affected car imports, Head of Cars Division in the Federation of Egyptian Chambers of Commerce (FEDCOC) in Giza, Amr Balba’ told Egypt Today.

If the custom U.S. dollar exchange rate is fixed at LE 16.25 per $1 for three months, car sales will improve, Balba’ added.

Latest data provided by the Central Agency for Public Mobilization and Statistics (CAPMAS) in June showed that car imports slumped 64.6 percent year-on-year in May.

Car importers and distributors were negatively affected. GB Auto recorded LE 150.9 million in losses in the second quarter and LE 305.5 million for the six-month period of 2017, driven by higher selling, general and administrative (SG&A) expenses.