Nissan Africa Chief Says Egypt Can Become Automotive Hub

According to the Africa Report, Nissan Managing Director for Africa Mike Whitfield Egyptian automotive assembly needs some protection and a strategy to encourage the local production of components which will make the country become a regional export hub.

Whitfield said that Egypt should end duty-free access for imported vehicles to be an automotive hub.

Whitfield said that Nissan has to pay duty on parts that are imported for local assembly, while some other vehicles are imported tax-free.

Whitefield added that Egyptian assembly needs some protection and a strategy to encourage the local production of components which will make the country become a regional export hub.

Last year, Egypt removed tariffs on cars imported from the European Union, as it seeks to develop its own automotive industry.

Mercedes-Benz signed a memo of understanding with the government in June 2019 to resume assembly operations.

Production of Egypt’s first locally assembled electric car, by China’s Dongfeng Motor, is scheduled to start by the end of 2021.

Whitfield continued that the poor global automotive atmosphere is prompting carmakers to seek cheaper labour and new markets in Africa. The Economist Intelligence Unit (EIU) does not expect the global automotive industry to recover 2019 employment levels until the second half of the 2020s.

Before COVID-19, Nissan director said, Egypt was growing strongly. This year, he said, the government found the right balance between defending against the pandemic and sustaining economic activity.

As a result, Egypt’s new car sales for 2020 are ahead of those for 2019 and the EIU predicts that Egypt’s GDP growth will pick up to an average of 4.7% per year from 2022.

Also, the government will help to grow the size of the local market by easing consumers’ access to finance, where good progress has already been made.

The director advised that while the affordability of vehicles must be a point of focus, Africa should not become a “dumping ground” for damaged and repaired foreign cars.

Strong post-COVID economic recovery prospects give Egypt the chance to establish itself as an automotive manufacturing hub.