On the surface, Egypt’s car market appears to be stabilizing.
Official data show a marginal uptick in new vehicle registrations for April 2025 — an encouraging signal after two years of turmoil.
But insiders say the recovery is more statistical than substantial, with lingering import restrictions, currency volatility, and outdated regulatory mechanisms distorting the picture.
While recent reforms by the Central Bank of Egypt (CBE) and a stabilized exchange rate have brought some relief, industry experts argue that neither supply nor demand is truly driving the market.
Instead, state policy is setting the pace through allocation quotas, import bottlenecks, and pricing distortions.
A fragile rebound
According to official figures, 37,235 new vehicles were registered in April, up slightly from 37,220 in March. Most were 2025 models, accounting for over 28,000 of the total.
Despite relative stability across models, private car registrations declined month-on-month, from 15,139 in March to 14,148 in April.
That hasn’t convinced the industry.
“We’re comparing a weak year to an even weaker one,” Osama Aboul-Magd, head of the Egyptian Automotive Dealers Association told Ahram Online. “Last year’s market was paralyzed by a dollar shortage and exchange rate instability. What we’re seeing now is a minor bounce off the bottom—not a recovery.”
Following the currency crisis triggered by the war in Ukraine, Egypt saw a severe shortage of US dollars. Reforms introduced in March 2024 have since helped eliminate the parallel market and restore trust in official banking channels, but many sectors, including automotive, remain low on the state’s priority list.
Dollar access still limited
While the availability of foreign currency has improved for critical sectors like manufacturing and spare parts, car imports remain tightly restricted—particularly by the asset-tracking system used by Egyptian customs.
“There’s been political direction to ease dollar access, but the car sector is not a priority, therefore it is not operating anywhere near capacity,” said Aboul-Magd.
One segment showing signs of life is the sub-EGP 1 million price bracket, buoyed by a modest uptick in locally assembled models. Still, Abul-Magd noted, “For the market to be considered healthy, we should be seeing over 300,000 annual sales. We’re far from that.”
Policy over market forces
Aboul-Magd added that the market is governed more by restrictions than by supply and demand.
Montaser Zaytoun, a board member of the Automobile Division at the General Federation of Chambers of Commerce, echos that assessment.
“Importing looks open on paper, but in reality, it’s still severely restricted,” Zaytoun told Ahram Online.
Dealers are operating on limited quotas, and regulatory complexity remains high.
A decree allowing personal vehicle imports has yet to be meaningfully implemented, keeping prices high and models scarce.
Zaytoun also warned that delays in parts for new or specific models persist while the spare parts crisis has eased—thanks to improved credit access and parallel market supply.
“New car owners are often unaware of their right to a replacement vehicle if maintenance is delayed, under the Consumer Protection Law,” he said.
Quotas favour incumbents
According to Aboul-Magd, the quota system used to allocate vehicles to dealers is a major structural issue.
Relying on a six-year sales average punishes new entrants who have yet to establish a market presence.
"Some agents receive as few as 150 cars annually—barely enough to cover operating costs," explained Aboul-Magd.
Zaytoun clarified to Ahram Online that the Ministry of Investment and Foreign Trade is calculating the average vehicle imports of companies over the past year to determine an expected growth rate, which will serve as the basis for allocating quotas for the current and upcoming year.
New companies are expected to receive initial quotas similar to established players to promote fair competition.
Under the current import decree (No. 9 for 2025), importers must establish or contract with a certified service centre and supply at least 15 percent of imported vehicles’ spare parts.
The General Authority must approve these centres for Industrial Development.
The regulation has created steep barriers for small-scale importers.
Even those bringing in a handful of vehicles must meet the same service and parts requirements as large dealers.
And even if all criteria are met, many still struggle to complete customs clearance due to technical issues like a locked “Asset Number” system.
Personal imports effectively frozen
Despite being legally permitted, personal car imports have all but halted. Red tape, procedural uncertainty, and import quotas continue to block individuals from importing vehicles for private use.
In effect, Egypt’s auto sector remains shackled by policy inertia—struggling to return to life not for lack of buyers or suppliers but because the game's rules keep changing, or worse, remain frozen in crisis mode.
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