Toyota plans localised factories in Africa, eyes Egypt

Aya Salah , Tuesday 2 May 2023

Japanese automotive giant Toyota Tsusho has unveiled its strategy to revive the automotive industry in Africa by establishing two localised factories within the continent, with Egypt as one of the preferred countries to host one factory, said former chairman of the Japanese company Jun Karube on Tuesday.



This came during a meeting between the President of the General Authority for Investment and Free Zones (GAFI) Hossam Heiba and Karube, who is also the head of the Japanese side of the Egyptian-Japanese Business Council, according to a GAFI statement.

Karube, who currently serves as a senior executive advisor and is the former President and CEO of Toyota Tsusho, spoke on behalf of the company during the meeting, which was attended by several high-ranking officials.

“The company will establish two factories within the continent each with a production capacity of 100,000 cars annually, in addition to its factories in several African countries,” Karube announced, citing Egypt's availability of automobile feeding factories, qualified manpower, and efficiency of the investment environment as reasons to establish a factory here.

According to the statement, Heiba emphasised Egypt's interest in attracting new Japanese investments and highlighted Japan's distinguished role in sustainable development and the transfer of technology to Egypt's market.

“This year will see a focus on the Japanese market, with the Egyptian-Japanese Business Council scheduled for August, and a promotional visit to Japan to attract investment in Egypt to be organised in September,” Heiba said in the statement.

In the same month, the Japan External Trade Organization (JETRO) will organise a visit to Cairo by a delegation of Japanese businessmen to promote trade and investment between the two countries.

This development follows Japanese Prime Minister Fumio  Kishida's three-day visit to Cairo, where President Abdel Fattah El-Sisi encouraged Japanese companies to invest more in Egypt.

According to a recent report by the Central Agency for Public Mobilisation and Statistics (CAPMAS), Japanese investments in Egypt reached $73.7 million (EGP 2,277,433,180) during FY2021/22, up from $37.1 million (EGP 1.146 billion) the previous year, an increase of 98.7 percent.

The two sides discussed the latest developments in the investment environment in Egypt, including the establishment of the Golden License, where the cabinet grants licenses to companies within only 20 days.

They also discussed tax incentives available for new investments and the various investment systems in Egypt, such as the general and special free zones aimed at increasing exports to foreign markets, investment areas aimed at replacing imports in the local market, technological zones, and economic zones such as the Suez Canal Economic Zone.

Heiba also proposed the idea of a sustainable partnership between Japan and Egypt to penetrate the African market, leveraging Japan's technological, investment, and export capabilities, as well as Egypt's expertise in developing African infrastructure.

In 2022, the National Strategy for the Development of the Automotive Industry was launched and it succeeded in attracting several companies already operating in the automotive component industry, including the Japanese company Sumitomo, which specialises in manufacturing automotive braids.

Late last year, Japanese car braiding giant Sumitomo-Egypt announced the construction of its largest factory in Egypt in 10 Ramadan City, with investments estimated at $100 million (EGP 3,095,040,000).

The new factory aims to export 100 per cent of the production and will begin the export process before the end of 2023.

Additionally, Japanese auto components manufacturer Yazaki Europe Limited announced at the time that it will begin building a factory for the manufacture of electrical systems for cars in the Fayoum governorate on an area of 60,000 square metres, with an initial investment estimated at 20 million euros (EGP 678,060,000).

The production process is expected to start in December 2024.


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