The Automotive Market Information Council’s (AMIC) report on Egypt’s automotive market performance for 2024 recorded an annual increase of 13 per cent in sales, marking a 19 per cent monthly growth in December.
Total sales averaged 103,000 vehicles, including passenger cars, buses, and trucks, according to the annual report, which signaled a potential rise in sector sales in 2025.
In December, 13,000 cars were sold, up from 10,800 a month earlier, the report said, adding that this was the highest monthly sales since August 2022.
Total vehicle sales across all segments stood at around 102,000 in 2024, with passenger cars remaining the highest number sold at close to 81,500 and up from 70,000 in 2023, the AMIC reported.
Commercial truck sales also registered growth, posting a 5.2 per cent increase in sales, with 13,387 trucks sold in 2024 compared to 12,723 in 2023, according to the AMIC.
The bus sector continued to face challenges in 2024, recording a 12.7 per cent decline in annual sales, with total buses sold dropping to 7,387.
However, automotive market analyst Ahmed Bahaa said the indicators were not accurate because they include both private and commercial vehicles and encompass various types of trucks, which can distort the real size and trajectory of the market.
For instance, an uptick in the tourism sector might lead to an increase in bus registrations by tourism companies, inflating overall sales figures without necessarily indicating true market growth, he explained.
What is needed is a more precise analysis that focuses primarily on private car sales, as these serve as a more stable and reliable benchmark for market demand, Bahaa noted.
He attributed the increase in sales, particularly in December, to periodic large-scale customs releases of vehicles, which can create temporary spikes in the figures. In some cases, customs clearances may involve specific models, leading to a sudden surge in licensing.
However, this should not be misinterpreted as a sign of higher sales.
Egypt’s automotive market continues to grapple with high production costs, which, coupled with lower sales volumes, perpetuate inflated pricing. Since local production lines are not operating at full capacity, manufacturers are compelled to set higher prices to offset production expenses while maintaining the same profit margins of 15 to 20 per cent, Bahaa said.
However, he added that if demand increases, prices will naturally decline, as operational and production costs will be distributed over a larger volume of manufactured vehicles.
Bahaa referred to Egypt’s success in promoting the conversion of cars to run on natural gas, facilitated by accessible loans. He also noted the growing appeal of electric cars, the taxes and customs on which are set at 14 per cent of the car’s value.
Bahaa called for more mechanisms to further encourage people to buy electric cars, especially locally manufactured ones.
Othman Abdel-Moneim, managing director of Auto Mobility, which produces the Chinese BYD car in Egypt, concurred. In an interview with Bloomberg, Abdel-Moneim said there were difficulties in providing financing to customers to enable them to buy locally manufactured vehicles.
Osama Abul-Magd, head of the Automobile Dealers Association and vice president of the Automobile Division at the Chamber of Commerce, said that under Central Bank of Egypt (CBE) directives monthly installments for car loans must not exceed 40 per cent of a customer’s total income.
Given the recent surge in car prices, where mid-range models are now priced between LE700,000 and LE800,000, many middle-class consumers are finding it difficult to meet these financing conditions, he said, as their incomes are not increasing at the same pace as vehicle costs.
Abul-Magd said that this was a significant hurdle, given that the surge in private car sales in Egypt that began in 2005 was driven by the banking sector’s auto loans. This created a thriving market for car sales, with annual sales peaking at 300,000 during the market’s golden years, he added.
Bahaa believes that the state should amend the regulations governing personal car imports to prevent traders from exploiting loopholes. Previously, some importers brought in vehicles on behalf of individuals and then resold them at a profit, leveraging exemptions on customs duties, taxes, and fees.
The new regulations require importers to demonstrate financial solvency and impose restrictions that allow personal car imports only once every five years.
Bahaa argued that these measures restore balance to the market, ensuring that personal car imports remain a service for consumers. Market dynamics should be dictated by fundamental economic forces, such as pricing, demand, and production, rather than individual import behaviours, he added.
* A version of this article appears in print in the 6 March, 2025 edition of Al-Ahram Weekly
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