Opinion: car manufacturing strategy and personal interests

Mohamed Aboul-Fotouh
5 Min Read

Over the past few weeks, the future of the Egyptian car manufacturing strategy, or in other words the “car law,” has returned to be amongst the hot topics after the crisis that occurred to this project during Angela Merkel’s visit. She announced her dissatisfaction of the project, which was accompanied by a letter from the European Automobile Manufacturers’ Association, where their rejection of the project was also revealed. They demanded changing more than six items.

Despite the assurances of the Federation of Egyptian Industries (FEI) and the parliament to reconsider all the items of the strategy, what takes place in reality is very unfortunate.

There are secret meetings, blocs, parties, and conflicts to impose opinions. Unfortunately, everybody overtly declares that they are looking for their own interest despite the criticality of the current economic conditions in Egypt.  It does not matter who makes it or does not make it out of the trap.

We must give up on our own personal interests during this difficult time. For five years now we have been talking about the strategy of car manufacturing and not a single positive step was taken.

Unfortunately, over the past period, three coalitions appeared. One of them demanded speeding up the issuance of the strategy regardless of its items, where they could be changed later. Another one of the demands is stopping the tempering and going back to reconsidering the entire issue, while the third coalition is one of interests.

It does not make sense for this to happen in Egypt, which is the largest market in the region and the focus of foreign companies trying hard to increase their investments in the country. How long will this climate of distrust and imposing opinions continue at the expense of the country’s interest?

During the third session of Egypt Automotive, several global companies were invited. I personally was not expecting anyone to attend; however, several prominent companies did. They included Volkswagen, Peugeot, Citroen, Ford, and others. They have tried to understand the nature of the market in order to increase the volume of their investments in Egypt, in addition to the coalitions they are forming with companies to supply production needs in order to import from Egypt.

Several global companies have entered into initial negotiations with respectable companies in Egypt with a history of distinct works in producing car parts with the goal of exporting them. However, what happened in reality four months after the visit?

Unfortunately, a state of desperation has taken over these companies which are still waiting for the legal framework of investment in Egypt and the incentives they should be receiving. The companies’ representatives from Egyptian companies do not know how the law will end up. In the end, this will only contribute to the creation of the negative impression global companies have about the Egyptian market.

In other words, this simply means we reject foreign investment, even with our immense need for increasing the flow of direct foreign investment as one of the most important sources of foreign currency, only due to our inability to make a unified decision without looking at personal interests.

We are not inventing something new. Several countries around us have already set a legal framework for investments as well as incentives in the sector of cars with fierce competition to attract huge investments injected by global companies in the sector of cars. Our lack of keeping up with the world has led to us being at the very bottom of the list of countries developed in the car trade and manufacturing.

Efforts must be unified. A government intervention is necessary in the face of this crisis. A clear roadmap for the car market must be employed if we really seek to increase production and exports.

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