Egypt Allocates EGP 1 Billion to Enhance Local Automotive Industry

Egypt has allocated EGP 1 billion in its FY 2024/25 budget to enhance the local automotive industry. The initiative aims to increase local component production to over 45% and attract investments. Seven companies are involved, with Nissan already receiving financial incentives to support operational costs.

In its FY 2024/25 budget, the Egyptian government has allocated EGP 1 billion to support the localization of the automotive industry. Finance Minister Ahmed Kouchouk highlighted that the strategy aims to attract investment in car manufacturing while increasing the local production of components to over 45% within the year.

Currently, seven companies have joined the automotive industry localization initiative. The Customs Authority began releasing initial shipments of production inputs for this initiative last August. To optimize operations, tax and customs processes for these registered companies have been automated. The Finance Ministry has also set up a specialized unit to enhance support and resolve challenges faced by these manufacturers.

Kouchouk emphasized the government’s outreach to car manufacturers, encouraging them to register for the initiative to meet state objectives regarding local component manufacturing. The government collaborates with relevant ministries to bolster support for domestic car production.

Eligibility for government incentives is linked to meeting targeted production goals. For instance, Nissan has received an initial incentive of EGP 120 million, which can be used to reduce government debts. This measure aims to alleviate financial pressures on the company and improve its operational cash flow.

The Egyptian government’s EGP 1 billion allocation in the FY 2024/25 budget signifies a robust commitment to localizing the automotive industry. Efforts include attracting investments, automating tax processes for ease of business, and providing incentives based on production targets. These strategies reflect a strong initiative to enhance local manufacturing capabilities and reduce financial burdens on automakers like Nissan.

Original Source: www.dailynewsegypt.com