In recent years, Egypt’s automotive market has undergone a transformation, marked by a palpable shift in consumer preferences and the rise of new market players. While traditional European and Japanese brands once dominated, the landscape is now being reshaped by the aggressive entry and rapid growth of Chinese car brands.

The government is actively pushing to reduce the country's reliance on imported vehicles and parts, aiming instead to foster a domestic manufacturing base. However, this ambition faces hurdles, particularly in the nascent but crucial electric vehicles (EVs) sector.

The Surge of Chinese Cars

Car sales in Egypt rose by 96.93% year-on-year (YoY) in the first half (H1) of 2025, reaching 74,490 units, compared to 37,830 in the same period last year, according to the Automotive Marketing Information Council (AMIC).

Chinese car sales in Egypt are booming, with their market share at 37.1% in H1 2025, up from 31.9% in H1 2024, as shown by AMIC data.

Egyptian buyers are frequently opting for Chinese cars not only for their affordability but also for enhanced safety features and overall quality, making them a competitive and favored choice in the local market, AMIC noted.

In this regard, a source from Mercedes-Benz, who spoke on condition of anonymity, told Arab Finance: “The rise of Chinese cars does not only impact buyers who purchase lower-priced vehicles, it also affects high-end clients. Someone who used to buy a car worth EGP 8 million to EGP 10 million is now asking why pay that much when they can get the same features in a car costing EGP 2 million or EGP 2.5 million.”

The source highlighted that some of the features buyers opt for in Chinese models include heating, cooling, massage functions, 360-degree cameras, blind-spot monitoring, and auto-parking.

In 2024, China accounted for 22.2% of Egypt's imports of vehicles, excluding railway or tramway rolling stock, and related parts and accessories, according to the International Trade Center’s (ITC) Trade Map. The imported value grew 4% during 2020-2024, and surged 122% between 2023 and 2024.

Prospects for Car Localization in Egypt

In June 2022, Egypt launched the National Strategy for Localizing the Automotive Industry. The plan was developed through cooperation among all industry stakeholders, foreign partners, and the Federation of Egyptian Industries (FEI). The strategy's importance lies in meeting the increasing demand for cars while easing pressure on the state's foreign currency resources.

Under the fiscal year (FY) 2024/2025 budget, an amount of EGP 1.5 billion was allocated to support the strategy. So far, seven companies have registered for the initiative, with three having submitted their invoices. The updated strategy received the cabinet’s approval in May 2025 and came into effect in July 2025.

According to the cabinet, the plan includes several car manufacturing and assembly projects. Among them is the Geely car assembly plant, which has two production lines with a total annual capacity of up to 10,000 cars and a local content ratio of up to 45% in the assembly lines.

Another is El Nasr Automotive Company, which uses more than 50% local components and produces 300 buses annually. The Egyptian German Automotive Company (EGA) plant is also a part of the plan, with an annual production capacity of 1,200 Mercedes cars and 3,000 Exceed cars.

The localization strategy includes the assembly of various brands, including Chinese cars, in Egypt. “When it comes to importing Chinese cars versus assembling them locally, pricing is the deciding factor,” the Mercedes-Benz source said. “Pricing impacts all. Although locally assembled cars might not have all the features we want, price will always be the key factor in car sales. ”

Egypt's Push for EV Manufacturing

Egypt is also taking steps to localize the manufacturing and assembly of EVs. As part of its efforts to develop the EV industry, a contract was signed to establish a joint-stock company to manufacture electric minibuses, with a production capacity of up to 300 buses. The country’s first-of-its-kind minibus is expected to have a capacity of 24 passengers.

Additionally, a production line for electric batteries, with a production capacity of 600 units, will be established in 2026. Development efforts also include the launch of the Egyptsat Auto company project, with an investment cost of about EGP 300 million. The project manufactures electric passenger cars and buses, EV charging stations, electric scooters, EV components, and spare parts, the cabinet announced previously.

These initiatives align with Egypt’s goal to expand local EV production by relying on local factories and foreign expertise in research and development. The country also aims to turn into a hub for exporting EVs to promising African and Middle Eastern markets, according to a 2023 study published by the cabinet's Information and Decision Support Center (IDSC).

Yet, EV adoption in Egypt might face several challenges, particularly in terms of infrastructure and the limited number of charging stations. Moreover, maintenance and the availability of spare parts are other hurdles, as explained by the IDSC study.

However, these challenges can be mitigated by establishing more EV charging stations and maintenance centers, raising the local component of EV parts to 50-60%, and relying on foreign expertise for electric battery production until manufacturing is localized.

This is in addition to localizing electric battery manufacturing technology by leveraging the expertise of foreign partners to achieve 100% localization for vehicles and related industries. This battery expertise can be used in other electrical industries as well, as per the study.

Egypt’s automotive industry is advancing through a strategic blend of market adaptation and government-driven industrial policy. The confluence of rising Chinese automotive presence, national localization policies, and nascent EV production capabilities signals a promising trajectory toward a more competitive, self-reliant, and sustainable automotive sector.

Continued progress will depend on addressing structural challenges, enhancing consumer awareness, and fostering partnerships that capitalize on both local and international expertise.

By Sarah Samir

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