How US Senate rejection will influence Egyptian auto market

12.12.2008 / Cairo-Detroit-Ruesselsheim / While General Motors Egypt is celebrating its 25th anniversary in Egypt with six full-size page advertorials in the 9-page Al-Ahram Automotive Supplement (12.12.2008), and spending money on advertisements and advertorials like if there is no tomorrow, we find the situation on the ‘other side of the world’ very different.

The US Senate late Thursday (11.12.2008) rejected an emergency bill to rescue Detroit automakers, heightening prospects that General Motors and Chrysler LLC may collapse and therefore face a very unpredictable future, which will surely affect GM and Chrysler factories and assembly lines worldwide, including the General Motors Egypt factory and the Chrysler AAV Egypt factory in Cairo.

"We have not been able to get this over the finish line," Senate Majority Leader Harry Reid said after 10 p.m., following daylong negotiations to broker a deal among lawmakers, automakers, auto workers and other interest groups. A House-passed bill to provide $14 billion in short-term loans - negotiated by the Bush White House and congressional Democratic leaders - was known to be in trouble. But few could have predicted the final stumbling block: A dispute over when UAW workers would consent to have their wages reduced to match those paid to nonunion workers in U.S. import-brand factories like Toyota, Nissan, Mercedes and BMW.

So what does this mean for the GM and Chrysler factories in Egypt if the US government refuses to bail-out the US car manufacturers?

Will GM Egypt / Mansour Chevrolet finally close the doors of their low-quality producing Egypt-based factories and concentrate on importing high-quality Made-In-Germany cars like the Opel Insignia, Opel Astra or even the Made-In-Spain Opel Corsa? Or will they cut the prices of the locally-assembled cars in Cairo by half in order to compete with the imported-car prices? Is it now the right time for the mother-company Opel in Ruesselheim and GM in Detroit to get involved in setting the car model and pricing policy in Egypt and set a maximum for the profit margins in order to be competitive with in the CKD and CBU automotive market?

And since GM Egypt / Mansour Chevrolet were already spending thousands of Egyptian pounds in these rather boring advertorials and advertisements pages, there is one question for which I didn’t find an answer:

Why wasn’t the GM Egypt / Mansour Chevrolet PR and Marketing team able to put at least one picture of any Opel model in those six newspaper pages?

Aren’t they proud of the German brand anymore? Or are the profit margins of the locally-assembled Chevrolet models much higher than those of the imported high-quality Made-In-Germany Opel models?

Should Opel Germany maybe start looking for a new importer and sole agent in Egypt?

And should Opel Germany maybe also start looking for a new and more professional PR & Marketing agency for Egypt and the Middle East region?

Especially since Opel Egypt and their PR & Marketing agency are still selling and promoting the old Opel Vectra instead of the new and innovative CAR-OF-THE-YEAR awarded-winning Opel Insignia, which has already been launched last June!?

Well, that’s what we will find out in the upcoming weeks.

Stay tuned for Auto Arabia’s comprehensive analysis on the Egyptian automotive market during this financial and automotive crisis, in which we will high-lights the ways and solutions of enlarging the market in Egypt during this crisis and show how the Egyptian and Middle East markets could save compensate the decreasing sales numbers in Germany and the USA.