Opportunities in the Automotive Industry in Egypt

1

Overview of Vehicle Production

Components Industry

Automotive Strategy “1M2020”

What Egypt has to Offer

Vehicle Assemblers in Egypt

Egyptian

Companies Private

& Public

Joint Ventures100%

Foreign

Ownership

Gorica Egypt

Automotive Eng. Co.

Passenger Cars

Commercial Vehicles

Rapid GrowthVehicle Registrations

2004 2005 2006 2007 2008 2009 2010PC Buses Trucks

72

121

172

262

In thousands of Vehicles

Source: AMIC Reports

68%

42%

32% 228206

25015%

-21% 21%

Projected

1. US$ 900 million serving the OE local

assembly and the aftermarket for 4.1

million vehicles

Annual growth rate is 14.8%

2. US$400 million Exports

Over 90% of exports are destined to

Europe (OEM aftermarket)

The Egyptian automotive components

production is estimated at US$ 1.3 billion:

Auto Components Industry in Egypt

Local 70%

Major Components & Customers

Electrical Wiring

Harnesses

Tyres

Brake Parts

Recent Developments

Egypt

invested US$ 100

million in a wholly owned

facility to produce Sunny & Pickup trucks

Egypt was the first country to assemble the

S-class outside Germany

Sabanci with Lasheen invested more than US$ 30 million to build

1000 coaches per annum

US$ 50 million to build 1,500

coaches

Pirelli invested US$ 65 million to increase Truck Tyre capacity by 50%

GM Egypt added state-of-the-art paint line with an investment of US$32 million. Yr 2007 to Yr 2009 CAPEX over US$ 75 million

Footprint Optimization

Manufacture & export wiring harnesses from Port Said

Toyota announced that it will start assembling the Fortuner SUV in Egypt by early 2012

Software engineering. Started 50 engineers. Now 250

Economic Reforms Growth in GDP

2020357

7.7%99

3,593

1,053

5.4

600

55

Unit 2008 2009 2010 2011 2012 2013

• GDP $ Billions 161 173 181 190 202 216

• Average GDP growth % 7.2% 4.7% 5.4% 6.1% 7.1% 7.7%

• Population (in millions) 80 83 84 86 87 89

• GDP per capita $ 2,013 2,079 2,142 2,221 2,319 2,443

• Annual new vehicle registrations

Thousands 261 206 250 365 451 541

• Passenger Carparc Millions 2.1 2.2 2.3 2.5 2.7 2.9

• New Passenger Car Registrations

Thousands 110 112 179 221 265 291

• Passenger Car penetration

Car/1000 27 27 28 29 31 33

Turkey’ GDP per Capita is $5,000 and its car penetration is 70

Untapped Potential !!

“1M2020”Unit

• GDP $ Billions

• Average GDP growth %

• Population (in millions)

• GDP per capita $

• Annual new vehicle registrations

000's

•Locally Assembled

Vehicles for Domestic Market

000's

• Locally Assembled Vehicles for Export *

000's

• Total Local Production

000's

* Factories producing more than 25,000 units

2020

357

7.7%

99

3,593

1,053

720

300

1020

Vision 2020: Stimulate expansion of automotive vehicle production to 1.0 million vehicles per annum by 2020.Strategy based on 4 Key pillars:

Adherence to International (UN ECE)

homologation Standards

Capitalising on the portfolio of Free

Trade Agreements

Encouraging local value

addition through Automotive Incentive Scheme

Support Firm level

competitiveness improvement programmes

Competitive wages and salaries.

What We Offer

Labour HOURLY Wages*:

Low skill/ manual work € 0.60 Semi-skilled € 0.75 Skilled € 1.00

Engineer MONTHLY Salary*:

Junior Engineer € 350Senior Engineer € 800

* Based on a survey conducted by EAFA/IDA on 20 auto component manufacturing companies.

Competitive cost of other factors of production.

Under good management and with proper training, the work force exhibits adherence to a good work ethic, very low absenteeism and commitment to achieving agreed KPIs.

What We Offer

• Strong Government support:o Trainingo Development of companies’ quality

systems and competitivenesso Export Tax Rebate

• Regional Trade Agreements e.g. COMESA, AFTA, Aghadir, Mercosur

• Exemption from Turkish and European Union customs duties for Egyptian exports

What We OfferProximity to a big market in Europe

OEM: annual Vehicle Production > 20 million vehicles Aftermarket: replacement parts for > 250 million vehicles values

at Euro 44 billion per annum

10 days shipping to UK, Scandinavia6 days to Italy, Spain, France

Low cost of shipping to Europe

Using the new 2010 RORO line, transit time is reduced to 5.5 days to UK and 4.5 days to France

THANK YOU