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Thursday, 09 April 2020

Egypt’s automotive exhibitions industry in the balance?

Automotive experts sound out their opinion about the effect of the coronavirus and online platforms on the future of the auto exhibitions industry

Khaled El Ghamry, Tamer El Shazly, Wednesday 25 Mar 2020
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Egypt’s first motor show was held in 1927. The Automobile Show was organised by the Royal Automobile Club at the Royal Agricultural Society Land in Gezira, Cairo.

For an entrance fee of 10 piastres, the show included a jazz concert by the Royal Irish Choir, a dance party, and a draw on a 1927 Torpedo Automobile.

In the 1970s, the Cairo International Market Show included some automotive booths under the names of the countries exhibiting their vehicles, and in the 1990s specialised motor shows started to see the light, gaining success due to the contribution of automotive agents in Egypt with models newly introduced by mother companies.

These dedicated shows continued until present – almost. Subsequent obstacles led the downsize or closure of some exhibitions in Egypt and other countries.

Some auto industry experts see that one of the main reasons for this is the powerful rise of social media and specialised websites. More shrinkage of auto shows is expected down the line.

The coronavirus outbreak has recently forced many countries to ban gatherings, affecting auto activities and events. Several shows were cancelled, especially in Asia. The Geneva motor

show, one of the main events in the international motor shows world, was put off.

Peter Hall, president of EMEA at Informa Markets, said “this year we have seen a number of leading automotive exhibitions postponing their running dates due to the unprecedented situation with COVID-19. As a business, we are closely monitoring the situation and are working closely with local authorities, as well as following the strict guidelines set out by the World Health Organisation when it comes to the running of our events.”

He added, “I think our main goal is to create global platforms and opportunities for industries, specialist markets and communities to trade, innovate and grow. As the world’s leading exhibitions organiser, we deliver over 550 international market-leading events, brands and experiences annually through face-to-face exhibitions, specialised digital content and actionable data solutions.

“In Egypt we already have a portfolio of eight events, covering key industries such as automotive, real estate, healthcare and energy – with more in the pipeline to be launched in the next 12 months.

“We are here to provide platforms in which business can be done, knowledge can be shared, and partnerships formed.”

When asked about his vision for the future of automotive exhibitions, Hall said “If we look at motor shows specifically, the ongoing trend seems to be shifting away from the static displays towards a more dynamic, interactive and kinetic experience that the public can connect with. I believe visitors to our shows are no longer satisfied with just seeing the best cars, but need that extra level of engagement and interaction with what the show has on offer.

“We live in a world where the traditional and digital coexist and complement each other. If you look at some of the recent unveilings which happen at our events, technology plays a huge part, but what people are really there for is a chance to get hands-on time with these cars.”

Influx “to our events remains strong, particularly with Automech which attracts well over 100,000 people annually. As an organiser, we are constantly looking at new ways to ensure a better experience for our visitors and the teams work closely with our exhibitors to ensure the event is packed full of engaging, bespoke experiences.”

As for the obstacles which encounter the exhibitions industry locally, Hall said “Egypt is driven by a strong GDP growth (5.6 percent) and is strategically located on the map, which makes it an attractive hub for trade in the region. However, some barriers to entry for some African nationalities hinder the process of Egypt’s events growing to their full potential.”

Hall agrees that Egypt is a promising and emerging market for the exhibitions industry. “The minister of trade and industry’s statement that he aims to ‘make Egypt a regional and international centre for international exhibition’ is a great testament to the current view on expanding this already growing industry.

“Egypt’s unique location and strong trade links with many international governments, industries and associations make a perfect marketplace for exhibitions. We have been active in Egypt since 2011 through a range of strategic and joint venture partnerships in exhibitions as well as in publishing. We have an office here that employs over 50 full-time exhibition professionals.

“Another key partner is the Engineering Export Council. We work together on hosted buyer programmes designed to attract visitors and buyers from key African markets to encourage trade between buyers and Egyptian exporters. Some of the countries that have already taken part in the programme are Kenya, Ghana, Mauritania, Tanzania, Nigeria, Uganda, Zambia, and Botswana.

We also attract more than 150,000 professional attendees to our exhibitions in Egypt annually, of which more than 10 percent are international. Exhibitor attendees participate from countries with strong trade links to Egypt, such as Brazil and India and from manufacturing powerhouses such as China and Turkey – all with hopes of securing business while attending our events.”

Highlighting the importance of exhibitions for the automotive industry, Hall noted the need for interactivity. “Trade shows are evolving from traditional networking events into immersive experiences that both excite and resonate with the consumers. More than half of our exhibitors tell us that they exhibit at Automech purely because it is a great sales generation exercise for them, and the others, although they get sales, prefer to use it as a launching platform or a brand enhancement project. Either way, we believe that Automech Formula is an established part of the annual automotive event calendar and we’re excited to see how the industry will transform in the years to come.”

Regarding the coronavirus’ effect on the automotive exhibition industry, Hussein Abdel-Razek, the marketing manager of FCA Egypt, said that the impact has been the key reason behind the cancellation of many events worldwide and that it will definitely be felt in the industry in terms of sales and delayed launches.

On whether automotive exhibitions will vanish gradually following the rise of online marketing and the flourishing of automotive corporate websites, Abdel-Razek said “There will

always be a need for automotive exhibitions. These events are the only opportunity for customers to see several models at the same time and to be able to compare easily before making a purchasing decision. They are also an opportunity for automotive companies to showcase their future models and concepts.”

Concerning the obstacles which encounter the exhibitions industry in Egypt he said they are mainly “instability in the industry in terms of constant rumours regarding imports, discounts, taxation, related legislations, etc.”

Whether he perceives Egypt as a promising and emerging market for the exhibitions industry, Abdel-Razek added “in general yes, however, the frequency, timing and number of motor shows need to be better coordinated.”

Regarding the importance of automotive exhibitions for the industry and whether shows increase sales, he said that “motor shows in Egypt play a significant role in the selling process since customers consider it an ideal opportunity to shop for cars and compare models in an environment that is ideal for presenting all brands under one roof.”

Udo Traeger, senior consultant for sustainable exhibitions and events and owner of Exhibition-Doctors, believes the coronavirus outbreak has had a negative effect on the automotive exhibitions industry. “Almost all auto shows scheduled for spring were cancelled in Asia. The Shows in Detroit (June), Paris (October) and Hannover (IAA Trucks, October) are still on.”

On whether the automotive exhibitions industry will vanish, Traeger said “It depends. Studies on the impact of Internet-based e-commerce suggest that in the near future exhibitions will keep their strong role in the marketing of different industries. The

automotive industry nowadays is under strong pressure by the buyers and governments to turn their strategies into sustainable, CO2-reduced and clean mobility concepts and not just to go on selling cars as usual. Especially in overcrowded cities, new concepts must prevail, otherwise the brands will lose to the new IT-based brands like Google, etc.”

About the obstacles which encounter the exhibitions industry in Egypt, he said, “I’ve been in Egypt for 15 years and many things in the industry have changed. It is crucial to have a modern exhibition venue and perfect access to the venue from the airport and other important logistical areas, to provide modern exhibition management and respective vocational education at universities and colleges, and to provide excellent services around the exhibition venue, such as hotels, security, catering, transport, shopping etc.”

Whether he perceives Egypt as a promising and emerging country for the exhibitions industry, Traeger said “Yes, definitely. Egypt is a country with a strong economy, talented young people and an emerging industry -- all requisites for a strong exhibitions industry not only domestically but as a North African hub.”

On the importance of automotive exhibitions for car sales, he said “Exhibitions will play a strong role in direct sales if they adapt to the latest mobility trends, innovation, and investment. Shows have to provide an out-of-the-box view into the future of connected living, smart cities and mobility, better environment, green economy, digitisation, AI, VR, and AR. Just as important, the shows must be online throughout the year.

“The next generations of buyers expect new kinds of exhibitions with a lot of entertainment factors. Above all, the show should provide visions of sustainable living in society.”

GianPaolo Pedretti, business development manager at Veronafiere S.P.A., said the virus has had a negative effect “since the main European event in Geneva was cancelled.”

She believes the main reasons behind the determination of the exhibition industry to withstand crises is that “the organisers are following the recommendation of the public authorities for the safety of the individuals. Moreover, the uncertainty of many exhibitors and visitors, especially international customers, is causing further complications. Cancelling or postponing an exhibition is not an easy decision to make, but it's the only reasonable thing to do when in the EU the risk of infection is so high.”

However, she doesn’t believe that automotive exhibitions will vanish gradually following the rise of online marketing and the flourishing of automotive corporate websites. “The exhibitions sector has changed as part of the digital transformation of the world, but people need networking, experience and meeting with each other, something that cannot be done online. Organisers are modifying the approach to visitors, taking more and more care of their customers’ experience.”

On her vision for the obstacles which encounter the exhibitions industry in Egypt, she added “The fragmentation of the industry is often a problem. However, small and medium-sized companies are the point of strength of the country and their unity can and will make a difference.”

She said Egypt is a promising and emerging country for the exhibitions industry. “Although my company decided to suspend its activities in the country, I personally believe that Egypt is a promising, growing economy that can count on its resources such as oil and gas, and consequently can be a driving economy in the Mediterranean area and a hub in African (especially East

African) countries. I sincerely hope that Egypt will believe in itself and its young, professional people. Education is the winning card.

“I believe the business generated from exhibitions cannot be replaced. We can benefit from others’ experiences and business models. In Verona, we host an event focused on car dealers: three days of educating seminars, conferences, and gatherings, with professionals exchanging infinite information to update their knowledge, exchange best practices, and know about new products. The education and networking approach is a win-win.”

Sherif Fahim, marketing manager of Kia Motors Egypt, opined that corporate contribution in motor shows has decreased in the past three years as the concept of the show is to put several different brands together for the consumer to compare between them in terms of design, capabilities, and prices.

He added that this is due to the fact that most companies now have websites to compare between the various brands, and gather information without the need to go to a specialised showroom. In addition, those websites and social networks in general also include test drive videos for anyone who wants to know more about these brands. Moreover, there is a large network of car dealers for every agent in Egypt and increasing numbers of showrooms where customers can check out the cars.

He said contribution in dedicated motor shows is limited to the companies that have new models to show to customers, or in case there are special offers or discounts which the agent targets to deliver to the largest number of clients.

Fahim said social media platforms have become a more effective and less costly tool to advertise vehicles than motor shows that cost at least EGP 3-4 million.

He believes the coronavirus should not leave a negative print on the industry, being a temporary crisis and seeing the government has adopted a host of protective measures to shield people and businesses against the repercussions of the spread of the disease.

Thanaa Afifi, SVP marketing of GB group, said the main reasons for organising shows is to introduce new models, adding that they will wane with time, and expecting the coronavirus will have a moderate impact on the exhibitions industry.

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