Egypt Allocates EGP 1 Billion to Strengthen Local Automotive Industry

The Egyptian government has allocated EGP 1 billion to localize the automotive industry in its 2024/25 budget. This initiative aims for over 45% local component production, with seven companies involved. Automated tax processes and incentives are being implemented to facilitate growth and investment in car manufacturing.

The Egyptian government has earmarked EGP 1 billion in its fiscal year 2024/25 budget to support initiatives aimed at localizing the automotive industry, as announced by Finance Minister Ahmed Kouchouk. The strategy targets attracting investment partnerships in vehicle manufacturing and aims to increase the proportion of locally produced components above 45% this year.

Currently, seven companies are engaged in the automotive industry localization initiative, with the Customs Authority having initiated the first shipments of production inputs last August. The government has also streamlined tax and customs processes for these registered entities via automation. Additionally, a specialized unit within Egypt’s Finance Ministry is established to facilitate procedures and resolve any challenges these companies may face.

Finance Minister Kouchouk emphasized the importance of ongoing communication with automotive companies to encourage their registration in this new system, which aligns with the government’s objectives to enhance local component production. He reiterated that strategic support would be provided in collaboration with relevant ministries.

Moreover, Kouchouk specified that the eligibility for incentives is contingent upon meeting predetermined performance targets. He noted that Nissan has recently received an incentive of EGP 120 million, which is applicable towards settling government debts. This financial support is expected to alleviate the company’s fiscal pressures and enhance its operational cash flow.

The Egyptian government’s allocation of EGP 1 billion reflects a strategic commitment to localizing the automotive industry, enhancing domestic production capabilities, and fostering investment partnerships. The establishment of incentive structures and streamlined processes is designed to stimulate local component production and improve financial conditions for automotive companies, ultimately encouraging growth in the sector.

Original Source: www.dailynewsegypt.com