Egypt Allocates EGP 1 Billion to Boost Local Automotive Industry

The Egyptian government has allocated EGP 1 billion in its FY 2024/25 budget to localize the automotive industry. The initiative aims for over 45% local component production this year. Seven companies are currently involved and tax processes have been automated to enhance efficiency. Additionally, Nissan has received EGP 120 million in incentives.

The Egyptian government has allocated EGP 1 billion in its fiscal year 2024/25 budget to enhance the local automotive industry, as revealed by Finance Minister Ahmed Kouchouk. The initiative aims to foster investment partnerships in car manufacturing and boost local component production to exceed 45% within the year.

Kouchouk mentioned that there are currently seven companies enrolled in the automotive industry localization initiative. The Customs Authority initiated shipments of production inputs under this framework last August, while automating tax and customs procedures for registered firms to streamline operations. A specialized unit established by Egypt’s Finance Ministry aims to facilitate processes and overcome challenges faced by these companies, ultimately increasing annual car production with added local value.

“We are continuing to communicate with car companies to encourage them to register in the new system in order to achieve the state’s goals in increasing the local component,” stated Kouchouk, emphasizing the government’s collaboration with relevant ministries to support local car manufacturing. He noted that the eligibility for incentives is contingent on meeting specific production targets.

Moreover, Kouchouk announced that Nissan has received an initial incentive amounting to EGP 120 million, which may be utilized to offset government debts, thereby alleviating the financial strain on the company and improving its operational cash flow.

The Egyptian government is actively promoting the localization of its automotive industry by allocating significant funds and establishing streamlined procedures for registered companies. With measures to encourage local production and the provision of financial incentives, the initiative aims to enhance the local automotive sector and stimulate investments, ultimately increasing the value of locally produced vehicles.

Original Source: www.dailynewsegypt.com