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Is Egyptian car market corrupt or collapsing?

Is the Egyptian car market collapsing or is it just a corrupt and unprofessional car market?

This is surely one of the most asked questions these days. Everybody is asking this question, including consumers, journalists, car sales person, so-called car �marketing’ managers and even some decision-makers and CEO in Egypt and in the mother-companies outside Egypt.

Although some organizations like the AMIC (Automotive Marketing & Information Council), which is gathering all the Egyptian automotive marketing and sales managers under one umbrella, claim they use �only accurate and transparent numbers, in coordination with the Egyptian customs and soon the Egyptian traffic departments’ we noticed in the past few weeks that every AMIC member and non-member is using different sales numbers in different newspapers and magazines. In one case I found two interviews in the same newspaper were two different car managers in Egypt (Toyota and Chrysler AAV Jeep) were using different numbers about the same Egyptian �car market’. Transparency? Yeah, sure!

The whole �mess’ in the Egyptian automotive market and the Egyptian media started off heavily after the TV-scandal which took place live during the very popular El-Aschera Masa’an program with the charming presenter Mona El Schazly on Dream2 TV (16.12.2008) and in which AMIC representative Rami Gad, which is by the way working for EIM (Renault & KIA importer in Egypt), played a �major’ role in discrediting the car companies in general and the marketing managers and sales managers in specific.

(To watch the TV show click here )

Not only did Rami Gad prove to a large audience and lots of important decision-makers in Egypt that he has no clue about the basic marketing and sales rules in the automotive business, but he also managed to assure to the Egyptian public and TV viewers that most of the car companies are misleading the Egyptian car customers and giving them false, incomprehensive and irreproducible information, just in order to keep the car prices as high as possible.

Most of the viewers who called-in during the TV show just confirmed the impression that is widely-spread in Egypt these days: Egypt has the most immature, corrupt and nontransparent car market in the region, if not worldwide.

The funny thing about Rami Gad was the fact that he is neither the press speaker of AMIC nor did he have an authorization or permission to speak for the AMIC on TV! Well, you can imagine what the AMIC did to him after this �TV scandal’.

And when I read a few days later that the Egyptian Automotive Manufacturing Association (EAMA) asked that no other entity except the EAMA should �speak for the automotive industry anymore or publish any automotive numbers anymore’ then this shows me how �credible’ and �accurate’ the AMIC numbers were during the past years.

And that was just the beginning.

After this �TV-mess’ all the major newspapers and magazine commented and published interviews with automotive-related persons and managers about the �misunderstandings’ and the inconsistent and contradicting statements and comments in the Egyptian TV and print media.

And the uproar of the Egyptian car importers / dealers and the so-called Egyptian �car factories’ (which are in fact nothing more than mid-sized car assembly lines) became even louder when Egyptian Industry & Foreign Trade minister Rashid Mohamed Rashid was wise enough to advice the car dealers and car companies in Egypt �to reduce their car prices in this tough financial crisis in order not to face bankruptcy at the end.’

And what was the response of the car dealers and sole agents in Egypt on the demands and advice of the minister? It was a hilarious and comical response at the same.

First they accused the minister in several interviews (without mentioning his name of course), that �responsible persons should not ask for irresponsible demands in public in order not to create a chaos in the market’. With this they meant the demand of the minister that car dealers should reduce their prices.

Instead of reducing their car prices, like their mother-companies did in the USA, Europe and Asia, those almost-bankrupt car companies and car assemblers are now urging Rashid Mohamed Rashid for a �stimulus-package’ in order to save these car companies and the �hundreds of thousands’ of workers and �billions’ of investment.

They asked the minister to reduce the taxes & customs for imported car components to 0% (instead of the current 2-5 %) and also asked him to cancel his recent customs-law, which allowed independent car importers to import cars aside the sole agents and official dealers.

But I am sure that they will not get away with this �customs-law’ demand as the Egyptian minister is much smarter than that, being a successful business-manager himself before he took over the ministry.

END OF PART ONE

In part two of our �Egyptian Market Analysis’ we will evaluate and analyze each of the major car companies in the Egyptian car market, and explain and put in plain words what role the Egyptian newspapers and magazine are doing in this highly confusing car market.


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Readers Comments:

Marwa from Cairo - Egypt wrote:
First of all Thank you for the Article, it is very usefull.

what I understood, that the car prices are (or should be) decreasing in the market,I have sold my car and i want to buy another one.. could anybody advice me when is the best time to buy a car, should i wait until the car market is more stable?

Actually I don't want to be fooled by the car dealers and agents, customs in Egypt as they always do with us

Many Thanks,
Marwa

Editors response:
Dear Marwa,

the longer you wait the more the prices WILL go down for sure! Many car companies have already reduced their prices, some reduced 5000 LE others reduced up to 50.000 LE.

Definitely wait until the next motorshow, which should take place end of February. Anyway, the more you wait the more transparent and cheaper the car prices will be.

What is your budget anyway?

Regards,
Editor


Tamer from Zürich - Switzerland wrote:
Hello,

One more thing here, I have been also trying to get some information about the customs that i have to pay for bringning in my car to Egypt from Switzerland too, but it is almost impossible, even the customs website is permanently down.

Can anyone tell me, or send me a document with the customs tables for cars, or at least a calculation method.....

Regards
Tamer

Mohamed from Zurich - Switzerland wrote:
Shame on us. What you said is all true but how and when will that change? I wish to have a car in Egypt for my family and myself to use in Egypt but it seems all lays for me when im thinking about bringing one from Switzerland. Youknow what im going to face in the customs zone from more lays. What shall I do? Wait? Or wait untill some thing comes true?
regards,
Mohamed


Dear Mohamed,
Customs will go down. That is for sure. Do not believe what the car dealers and car importers tell you or what they say in their paid advertorials in the Egyptian newspapers and car supplements.
Besides the customs, the car prices will also go down because the Egyptian car market is currently collapsing and a lot of car dealers will have to sell their cars for any price soon. Some companies already reduced their prices, e.g. Skoda reduced some car models 20.000-40.000 LE, Volkswagen reduced some models 10.000-25.000 LE, Fiat reduced some models 5.000-20.000 LE, etc. BMW reduced the 3 series more than 50.000 LE, and if you want to go for the locally-assembled BMW 7 series (750iL / E65) then you can get even for 650.000 LE instead of originally 1.100.000 LE ! That is almost 50 % discount!
Editor