Egypt's auto market develops well

Egypt’s commercial vehicle market performed well ahead of BMI’s expectations in 2006 and the first half of 2007, helping to sustain high levels of sales growth in the automotive sector and paving the way for an expansion of local vehicle manufacturing, according to BMI’s latest Egypt Automotive Report. The strength of the commercial vehicle market has attracted investor interest, including Turkey’s Temsa, which is building a bus plan in the Ramadan Industrial Zone. The passenger car sector is also a focus of foreign interest, which is being encouraged by the government’s new incentives for factories supplying the local automobile industry or exporting their production. The incentives aim to attract nearly US$1bn of investment into the country, along with US$1bn worth of exports over the next five years. In August 2007, Malaysia's Proton announced that it was evaluating a plan to build a production plant in Egypt. According to Proton managing director Syed Zainal Abidin Syed Mohamed Tahir, Egypt provides a large market, but could also act as a base to countries, such as Saudi Arabia and Sudan. A decision on the Egyptian plant is also expected by early 2008. Proton’s announcement came after India’s Tata Motors began examining the possibility of establishing a car plant in Egypt. No further details have yet been released about Tata’s intentions for the Egyptian automotive industry, but Tata Motors’ involvement in Egypt would significantly enhance its production base.