Egyptian Vehicle Market in 2019 was hit again by price increase and has broken the recovery in place. Indeed, Total sales in 2019 have been 178.699, down 12.9% and perspectives for 2020 are almost uncertain. Three brands, Chevrolet, Hyundai and Nissan held half of the market.
Egyptian economic growth slowed for the second consecutive quarter in Q2 FY 2020, which ran from October to December, as suggested by a decrease in the quarter’s non-oil private sector PMI reading compared to the previous quarter.
More positively, international reserves, which have been climbing since Egypt began the three-year IMF program in 2016, rose to USD 45.4 billion in December, the highest reading in at least a decade-and-a-half. In other news, the government announced in December that several international energy companies, including Chevron and Royal Dutch Shell, had been granted exploration rights in Egyptian waters, in a bid to boost the energy sector.
Following two years (2014 and 2015) of high sales volume, in 2016 and 2017, the Egyptian vehicles industry has been buffeted by a devalued currency, spiraling new-vehicle price increases, higher interest rates, and three hikes in fuel prices as the government rolls back fuel subsidies to control budgetary expenditures. In addition, VAT increased in 2017 and duties for over 2 liters vehicles further increased.
The result was an unprecedented fall of demand with 2017 light vehicles sales down at 137.821, losing 36% from the previous year.
Finally during the 2018 the huge pressure on vehicles price has been reduced and the positive economic trend created the mood for a recovery. In fact, according to data released by the local Association of Car Manufacturers, the market ended the year with 193.000 light vehicles sales.
In 2019 the market has been hit again by the price increase and ending the year with a double-digit fall, breaking the recovery. Indeed, Total sales in 2019 have been 178.699, down 12.9%.
In the competitive landscape, two brands fight every year for the leadership and in the 2019 Chevrolet is prevailed over Hyundai witha large gap. In 2019, these two brands achieved a combined share of 36.3% and, while adding the score reported for the third, Nissan, 50% of the market was concentrated in 3 players.
After registering large drops during the past years, the Egyptian market is seen to be starting recovering in the 2019-2025 period of time. However, despite moderating in recent years, fiscal imbalances continue to restrain economic potential.
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