Over the past few months, Egypt’s car dealers have been offering discounts on the purchase of new cars, leading to a noticeable drop in the prices of the majority of brands.
The decrease has been driven mainly by increased competition between car companies, the expansion of local manufacturing, and the entry of a number of new foreign brands into the Egyptian market.
Khaled Saad, secretary-general of the Egyptian Automobile Manufacturers Association and chairman of the Industry and Trade Committee at the Homat al-Watan (Guardians of the Homeland) Party, said the country has been working on a strategy meant to further localise the automotive industry by encouraging importers to shift towards manufacturing and increasing the proportion of locally produced components.
The first phase of the initiative, launched in July, is expected to further boost production and support sector growth.
The strategy was borne of import challenges and the rise in Egypt’s imports bill to $8 billion, Saad said. Fees on assembled spare parts do not exceed six per cent, compared to customs duties of up to 40 per cent on imported cars, he explained.
When the US raised customs tariffs on certain countries, demand also hiked for manufacturing in Egypt from China and some European and Asian countries. These countries are seeking to benefit from customs exemptions under Egypt’s international trade agreements, such as the Agadir Agreement, the Common Market for Eastern and Southern Africa (COMESA), and the European Partnership Agreement, Saad said.
He added that local manufacturing meets domestic and export demand and covers 70 per cent of Egyptian consumers who opt to buy cars priced below LE1 million. He noted that 80 per cent of locally manufactured cars fall within this price range.
The rise in the sale of locally manufactured cars has also reduced demand for foreign currency and contributed to a decline in exchange rates, lowering car prices in Egypt as dealers set their prices based on foreign currency rates, Saad said.
Five new car assembly plants have come online over the past year, bringing the total number of local assembly lines to 23 and producing around 120,000 vehicles annually.
Shady Rayyan, chairman of the board of the Egyptian Automotive Company, said that alongside the growing shift towards local manufacturing, the imports of new models have also increased, pushing supply above demand. Heightened competition among companies has further driven car prices down, he said.
With car prices already down by 15 per cent, Rayyan expects an additional 10 per cent drop due to the depreciation of the dollar against the pound and speculation over a two-phase reduction in interest rates before the end of the year.
If the dollar appreciates against the pound, car prices will go up, since 80 per cent of pricing is determined by the exchange rate, Rayyan said.
The majority of locally manufactured cars should be exported, he suggested, in order to create a balance between supply and demand and generate more foreign currency revenue for Egypt.
Ahmed Al-Mazahi, an automotive expert, attributed the decline in car prices to fierce competition among Chinese manufacturers in their domestic market, which is the largest in the world. This competition has spilled over into global markets, including Egypt, pushing more dealers to make competitive offers, he said.
Several factors determine whether companies maintain further discounts or raise prices, such as supply and demand, the variety of product designs, the features offered, and the narrow price differentials between brands, Al-Mazahi explained.
Saad noted that the drop in car prices should continue as long as companies introduce new locally manufactured products that remain unaffected by the currency shortages experienced in previous years.
Car prices surged to record levels in recent years, climbing by 200 to 300 per cent due to the successive depreciation of the Egyptian pound. The dollar shortage in 2023 also made it difficult to secure the foreign currency needed to import both spare parts and finished vehicles.
Saad expects prices now to keep falling through the end of the year, provided supply remains stable and competition among dealers and manufacturers continues. He anticipates that the market will begin to stabilise at the beginning of 2026.
Car sales have also started picking up, according to the Automotive Marketing Information Council (AMIC). Sales rose by 96.9 per cent year-on-year to 74,490 units in the first six months of 2025, compared with 37,830 a year earlier.
The depreciation of the pound and a hard currency crunch caused car prices to skyrocket in 2023, leading to sales of new cars falling by almost 50 per cent, from around 134,000 in 2022.
* A version of this article appears in print in the 28 August, 2025 edition of Al-Ahram Weekly
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