Egypt’s Automotive Market: From Declining Sales to Cautious Optimism

Updated 5/28/2024 8:00:00 AM
Egypt’s Automotive Market: From Declining Sales to Cautious Optimism

The Egyptian automotive industry has been facing challenges, including plummeting sales, fluctuating prices, and evolving customer preferences. These challenges have put the market in a state of flux.

Yet, cautious optimism surrounds the automotive market’s future growth trajectory as the exchange rate stabilizes.

Current Landscape

The automotive market in Egypt has been affected by recent circumstances. Sales, payment methods, and customer preferences have all been impacted.

Nasser Abdellah, a car expert from Phantom Auto Company, tells Arab Finance that "purchasing in installments decreased as interest rates soared."

For his part, Muhammed Abbas, a car owner planning to buy a new one, said to Arab Finance, "I postponed purchasing a car until prices stabilized to some extent. Prices were constantly increasing in the past period.”

“Besides, the same model of car would possibly be sold in two different places with a price difference of about EGP 70,000, which is illogical. That is why a recession occurred, making people hesitant about buying and selling."

In 2023, vehicle sales in Egypt declined by 51%, with 90,359 vehicles sold, compared to 184,771 units in 2022, according to a report by the Automotive Market Information Council (AMIC).

The report also revealed that sales of private passenger cars dropped by 48% to 69,175 units last year, from 133,857 vehicles in 2022.

Customer Preferences

Customers in the Egyptian market showed a preference for Asian cars. Japanese brands, namely Nissan, Toyota, Suzuki, and Mitsubishi, captured 32.5% of total car sales in Egypt last year. They outperformed Chinese cars that are vigorously competing to control the Egyptian market.

Chinese brands Chery, MG, and BYD controlled about 22% of sales, totaling over 90,400 cars in 2023, as per AMIC’s report.

Abdellah notes, "Buyers prefer luxury cars and lean towards European brands. As for Asian cars, customers prefer electric models because of their convenience and pricing."

On the other hand, Abbas says, "I personally prefer buying used cars. I am certain I can get a used car with better specifications and efficiency for the same price as a new one. In this case, I find used cars to be a better option than brand-new ones. ”

Many consumers prefer a car with more options and better convenience to a new one. "When buying a new car, the most important factors for me are efficiency, road stability, and safety features,” Abbas adds.

As for the prices, Abbas points out that they actually vary with the car’s efficiency and condition, which is logical."

Challenges and Cautious Optimism

If Egypt’s economic scene continues to stabilize, the automotive market could see a breakthrough.

Abdellah highlights, "The market will recover if the exchange rate stabilizes for a long period because customers want to buy at the appropriate price."

The overall automotive market in Egypt is expected to experience a slight decline, with a compound annual growth rate (CAGR) of -2.68% between 2024 and 2028. This translates to a projected market size of $4.43 billion by 2028, according to Statista Market Insights.

The Egyptian automotive industry is at a crossroads, grappling with declining sales, fluctuating prices, and changing customer preferences in recent years.

Despite these hurdles, the stabilization of the exchange rate offers a glimmer of hope. Pent-up demand suggests that the automotive market can rebound with the right conditions.

By Sarah Samir

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