Egypt in Talks with Mercedes-Benz to Deepen Automotive Localization

Egypt is exploring new opportunities to localize automotive manufacturing and expand domestic supply chains following high-level talks between the government and Mercedes-Benz Egypt.

During a meeting in Cairo, Egypt’s Minister of Industry Khaled Hashem held discussions with a delegation from the German automaker led by Stephanie Volz to review prospects for expanding the company’s operations in the Egyptian market and strengthening cooperation in the automotive sector.

According to a statement issued by the Egyptian Ministry of Industry, the talks focused on attracting further investment in vehicle manufacturing and increasing the share of locally produced components as part of Egypt’s broader industrial development strategy.

At the center of the discussions was the Automotive Industry Development Program (AIDP), a government initiative designed to encourage global automakers to establish or expand production in Egypt through a range of financial and regulatory incentives.

Minister Hashem described the program as a cornerstone of Egypt’s strategy to build a competitive automotive industry capable of serving both domestic demand and export markets. He emphasized that the initiative operates along two parallel tracks: meeting the needs of the local market while simultaneously boosting Egypt’s export potential in the regional automotive supply chain.

A key priority of the ministry, he said, is the development of supporting industries that supply parts and components to vehicle manufacturers. Increasing the use of locally produced inputs would help create a more integrated industrial base and strengthen Egypt’s position as a manufacturing hub.

Hashem encouraged representatives of Mercedes-Benz to explore the incentives available under the AIDP program, noting that the initiative offers enhanced benefits for companies that increase their reliance on local suppliers. The level of incentives rises as manufacturers expand the share of domestically produced components and establish deeper supply networks within the country.

During the meeting, company representatives outlined several operational challenges affecting their current activities in Egypt, including procedural and customs-related issues. The delegation also presented proposals aimed at improving the efficiency of their operations and facilitating future expansion.

The minister reaffirmed the government’s readiness to support the company and pledged close coordination with relevant authorities to address obstacles and streamline administrative procedures. He said ensuring a stable business environment for global investors remains a priority as Egypt seeks to attract additional industrial investment.

On her part, Volz expressed the company’s interest in strengthening its strategic partnership with the Egyptian government and expanding its presence in the market. She noted that the company is marking 26 years since the start of its operations in Egypt, where it maintains a regional headquarters representing the brand’s global identity.

Volz said the long-standing presence of the automaker reflects the company’s confidence in Egypt’s growth potential and the opportunities offered by its evolving industrial landscape.

Egypt has been intensifying efforts to attract international automotive manufacturers as part of a wider push to diversify its industrial base, increase exports, and create higher-value manufacturing jobs.