Egypt Allocates EGP 1 Billion to Enhance Local Automotive Production

Egypt has allocated EGP 1 billion for FY 2024/25 to boost the local automotive industry by localising production. Seven companies are registered under this initiative, with efforts underway to facilitate their operations and increase local component production to over 45%. Nissan has received a significant incentive to alleviate financial burdens as part of this strategy.

In an effort to advance the local automotive sector, the Egyptian government has allocated EGP 1 billion in its fiscal year 2024/25 budget. This initiative, as explained by Finance Minister Ahmed Kouchouk, aims to enhance investment partnerships in car manufacturing while increasing the local production of automotive components to over 45% this year.

Currently, seven companies are registered under the automotive industry localisation initiative, with the Customs Authority having released the initial shipments of necessary production inputs last August. To improve efficiency, tax and customs transactions for the registered companies have been automated. The Egyptian Finance Ministry has also established a specialized unit dedicated to addressing challenges faced by these companies, encouraging increased annual car production with enhanced local value.

Minister Kouchouk expressed ongoing communication with car companies, urging them to register within the new system to fulfill governmental objectives for boosting local component production. Collaboration with relevant ministries aims to provide the necessary support for expanding local car manufacturing capabilities.

Kouchouk further clarified that eligibility for government incentives is contingent upon meeting specific production targets. Notably, Nissan has already received its first incentive of EGP 120 million, which can be utilized to offset government debts. This financial support aims to alleviate Nissan’s financial strains and assist in maintaining operational cash flow.

The Egyptian government’s allocation of EGP 1 billion to foster the local automotive industry represents a strategic effort to boost domestic production and attract investment. With streamlined processes and targeted incentives, the initiative aims to enhance local value in car manufacturing. These measures signal a commitment to advancing the automotive sector while supporting registered companies to contribute positively to the economy.

Original Source: www.dailynewsegypt.com