Egypt’s largest automotive assembler and distributor, Ghabbour Auto (GB Auto), posted net profits of LE116 million ($16.67 million) in 2013, a 46.7 percent drop from the previous year, the company stated Tuesday.
The modest financial performance was attributed to weaker sales for three-wheelers (auto rickshaws, and commonly known as tuk-tuks), a shrinking Hyundai market, and increases in general expenses.
The Hyundai market was pressured by rising demand on the Chinese automobile Geely.
By the end of 2012, GB Auto inaugurated a new facility to assemble the Geely with plans for the Chinese car to ultimately replace the medium sized Hyundai Verna.
In 2013, GB Auto logged around LE9 billion ($1.3 billion) in revenues, 14 percent of which came from motorcycles and three wheelers.
"The year just ended was one of the worst, in business terms, that I have ever seen. It was also a decisive turning point for GB Auto," Raouf Ghabbour, CEO of GB Auto, was quoted as saying.
Motorcycles and three wheelers represent the third source of revenue for GB Auto following passenger cars (contributing 68 percent to revenues) and commercial vehicles and construction equipment.
The weak sales of tuk tuks were attributed to their relatively high prices as GB Auto attempted to offset high customs levied on imported manufacturing components.
Often seen as involved in crime, the government recently moved to ban the import of tuk-tuks and mototcycles for one year, including their components.
"The motorcycles and three wheelers line of business is likely to face a challenging year, given recent unfortunate regulatory decisions by the government of Egypt that will restrain supply. While we believe that top line sales will be affected by the ban, it will have minimum impact on our bottom line this year," Ghabbour added.
Earlier, in January, the country's State Commissioners Authority (SCA) issued a non-binding decision to courts to halt the import of tuk-tuks, claiming that auto rickshaws posed a security threat in several areas nationwide, particularly slums.
GB Auto's head of public relations responded by underlining the importance of three wheelers to the economy, saying they provide jobs and are a key mode of transport in slums.