The relaunch of the Al-Nasr automotive factory after a 15-year hiatus has rekindled memories of the iconic Ramses car among Egypt’s older generations.

This vehicle was not only the company’s inaugural production model but also the first car manufactured in Egypt. Alongside the Ramses, the Shahin and Fiat models, also produced by Al-Nasr, became staples for millions of Egyptians from the early 1960s through the late 1980s.

Al-Nasr’s comeback was celebrated on Saturday with the announcement that the company had delivered its first batch of electric passenger buses taking 49 people in partnership with China’s Yutong to Transport Ministry-affiliated companies.

The new buses can be used for public transport, worker commutes, and tourism. They are energy efficient, capable of travelling up to 500 km on a single charge, and offer a 30 per cent reduction in energy costs compared to diesel-powered alternatives.

The initial production target stands at 300 buses to be produced annually, with plans for expansion based on market demand.  

The local components in their manufacture exceed 50 per cent, with the chassis and natural gas engines assembled domestically in a bid to support national industries, reduce the reliance on imports, and depend more on green energy solutions.

Alaa Al-Sabaa, a board member of the Automotive Production Division at the Federation of Egyptian Industries, estimates that Egypt requires around 700 large buses annually. The Al-Nasr production will address a significant portion of this demand, while curbing the dependence on imported vehicles.

Only 200 large buses were licensed last year, primarily serving the Public Transport Authority in Greater Cairo and Alexandria, he noted.  

In recent years, the Egyptian automotive market has experienced a significant decline in sales after a period of recovery. In 2021, 290,000 passenger cars were sold. However, this figure dropped to 110,000 in 2023. Projections for 2024 estimate sales will range between 120,000 and 130,000 cars.  

Al-Sabaa believes Egypt is well-positioned to attract foreign investment to its automotive sector. Two key factors bolster this potential: high demand, which supports large-scale production and lowers costs through economies of scale; and export opportunities.

Egypt’s economic zones near the Suez Canal intersect with major global trade routes, offering a gateway for exports to international markets, particularly Africa, he explained.  

Hussein Mustafa, CEO of the Egyptian Automobile Manufacturers Association, concurred. He said that many global car producers want to invest in Egypt due to its large domestic market and the steady growth in demand fuelled by population increases.

Al-Nasr’s re-entry into the market is an important step in stimulating the automotive sector, especially as the company has announced that plans are also underway to reintroduce passenger cars, with experimental phases scheduled to begin in May 2025 and full-scale production expected by the end of that year, Mustafa stated.

Al-Nasr is expected to produce 20,000 passenger cars annually, he added.

Egypt’s public and private-sector capabilities have the potential to spark a transformation in the automotive industry, encompassing both passenger vehicles and buses. Mustafa said that iconic red double-decker London buses are exported annually from Egypt, where they are manufactured by a private-sector company.  

However, the true challenge for the automotive industry will remain its pricing strategy, particularly amid global economic challenges including rising inflation, disruptions in supply chains, and surging energy costs.  

Osama Abul-Magd, head of the Egyptian Automobile Dealers Association, said the return of Al-Nasr is set to reduce Egypt’s reliance on imports, attract foreign investment, create job opportunities, and open avenues for export.

“The Egyptian market is very appealing, especially given the global climate, and presents opportunities for growth. Major foreign manufacturers like Volkswagen are seeking production hubs outside Europe to mitigate energy and labour challenges, for example. Dozens of Chinese electric-vehicle manufacturers are striving to establish a presence internationally to solidify their global standing,” Abul-Magd said.

The Al-Nasr Automotive Company was the first car-manufacturing enterprise in the Middle East when it was set up in 1960 as part of a national initiative to bolster local industry and maximise human resource potential.

The company’s primary objective was to spearhead an industrial renaissance by producing domestically manufactured vehicles in collaboration with international giants like the Italian Fiat Company and Zastava.  

In 1960, Al-Nasr launched the Ramses car in partnership with the German company NSU, leveraging cutting-edge European designs and the technology of the era. Over the years, it introduced models such as the Nasr 128 and Shahin, which became synonymous with Egyptian motoring during the 1970s and 1980s.

In its heyday, the company employed over 12,000 workers.  

By the early 1980s, Al-Nasr had achieved a significant milestone with local manufacturing rates reaching 54 per cent for passenger cars and 57 per cent for buses and trucks.  

However, despite its successes, Al-Nasr faced severe financial difficulties in the 1990s, leading to its being split into two separate entities.

In 2008, plans for its liquidation were announced, only for the decision to later be reversed. A long-term strategy to settle the company’s debts was introduced, with it ceasing production entirely in 2013.  

Today, Al-Nasr is being revitalised as part of Egypt’s strategy to reinvigorate its automotive sector, bolster its economy, and foster sustainable industrial practices.

* A version of this article appears in print in the 21 November, 2024 edition of Al-Ahram Weekly under the title: Al-Nasr revives local vehicle production