After a year marked by declining prices, stronger sales, and wider consumer choice, the market has shifted back to caution, as geopolitical developments, particularly the US-Israeli war on Iran, have reignited pressures on import costs and exchange rates.
Prices have already risen across a wide range of models, with increases ranging between EGP 30,000 and EGP 200,000. Some vehicles are now being sold above official prices, reflecting the renewed spread of unofficial markups.
Overprice returns
“The return of overpricing has become a clear phenomenon in the market,” said Montasser El-Zeitoun, a member of the Automotive Division at the Federation of Chambers of Commerce, noting that some models are being sold above official prices, and some agents have maintained price stability despite mounting pressures.
He urged consumers to boycott cars that have seen exaggerated price increases and turn to alternatives offered by agents who have reduced profit margins to support market stability.
El-Zeitoun said the current increases are economically justified, linking them to “the rise in the dollar, the impact of the global crisis, and the war in the region, in addition to the risks facing maritime shipping,” stressing that the market’s heavy reliance on foreign currencies means exchange rate movements directly affect final prices.
Sharp reversal
The latest developments mark a sharp reversal from 2025, when Egypt recorded its largest drop in car prices, estimated at around 22 percent, alongside a strong recovery in sales, which rose by 77.5 percent in the first 10 months to about 139,000 vehicles.
At the time, the market had benefited from improved supply, the entry of around 10 new production lines, and relatively easing currency pressures, with some models seeing price declines of up to 30 percent as distributors offered discounts to clear inventory.
However, the renewed surge in the dollar and higher shipping and insurance costs, exacerbated by geopolitical tensions, have pushed companies and traders to price based on anticipated risks rather than current costs, leading to precautionary increases.
30 percent price hikes
Osama Abu El-Magd, head of the Car Dealers Association, said the latest price increases came just as the market was expecting stability.
“What happened in the car market came at a time when everyone was hoping for relative stability in both new and used cars, but a new wave of increases imposed itself, driven by global conditions and recent military tensions in the region,” he said.
Abu El-Magd noted that some companies have already raised prices by around EGP 100,000, with increases reaching up to 30 percent in certain models, but stressed that “it is not possible to talk about a general increase of 30 percent across the entire market; this percentage applies only to limited cases.”
He added that early estimates suggested a short conflict could raise prices by one to two percent, while a prolonged escalation could lead to increases of between five and 15 percent, depending on developments.
El-Zeitoun said all car segments are affected by the current pressures, given the market’s reliance on imports of fully built vehicles, components, and spare parts, although not all models have increased at the same pace.
As new car prices rise and discounts fade, part of the demand is shifting toward used vehicles, potentially pushing their prices higher as well.
He also warned that any disruption to gas supplies would affect local manufacturing, noting that domestic production remains dependent on energy inputs and imported components.
Both experts pointed to consumer behaviour as a contributing factor, with some buyers rushing to purchase cars as a hedge against currency depreciation, increasing demand, and driving prices higher.
Abu El-Magd advised consumers to delay purchases and avoid paying overprice, warning that the crisis may persist.
The market is also facing internal challenges related to pricing discipline, as some agents adhere to official prices while others confront violations by distributors imposing unofficial markups.
After a period of recovery, Egypt’s car market is once again being driven not only by supply and demand, but also by uncertainty over a prolonged regional conflict, a rising dollar, and higher shipping costs. For now, caution remains the dominant feature shaping the market’s trajectory.
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