Egypt’s Finance Minister, Ahmed Kouchouk, announced that the current 2024/2025 fiscal budget includes a dedicated allocation of EGP 1 billion to fund the country’s “Automotive Industry Localization Strategy.” This initiative is aimed at increasing the local content in vehicle production and attracting investment in the automotive manufacturing sector.
Key Focus: Boosting Local Content in Vehicle Production
Kouchouk revealed that one of the central targets for the current year is to increase the local component in vehicle production, aiming for more than 45% local content. This ambitious goal is part of the broader strategy to not only stimulate the national automotive industry but also reduce dependence on foreign imports, ensuring sustainable growth and fostering domestic innovation.
Seven Companies Already Registered in the Automotive Localization Initiative
As part of the ongoing efforts, seven companies have already registered under the “Automotive Industry Localization Strategy.” This initiative, which began making significant strides in August 2024, saw the Customs Authority clear the first shipments of essential production materials, marking a key milestone in the project’s progress. The logistics and regulatory frameworks around the project have been enhanced to ensure smooth operations for these companies.
Digitizing Taxation and Customs Procedures
In a bid to streamline operations and facilitate smoother processes for registered companies, Egypt’s Ministry of Finance has introduced a fully digitized system for tax and customs transactions. This step is expected to significantly reduce administrative burdens and improve efficiency. The ministry has also established a dedicated unit to assist companies with navigating the registration system and resolving any potential challenges swiftly, further ensuring the success of this automotive sector initiative. Kouchou assured that the Ministry of Finance, in collaboration with other relevant governmental bodies, is working to provide all necessary support to simplify the production process for local manufacturers.
Nissan Becomes the First to Receive EGP 120 Million Incentive
In line with the strategy’s implementation, the first incentive payout was issued to Nissan Egypt, amounting to EGP 120 million. This payment is based on the company’s achievement of local content production targets, and it can be used to offset any existing government debts, offering financial relief and enabling Nissan to reinvest the funds into its operations.
Fostering Sustainable Growth in Egypt’s Automotive Sector
With a commitment to both financial incentives and regulatory support, the Ministry of Finance is helping to cultivate an environment that encourages both local and international investments in Egypt’s automotive manufacturing sector.
By combining robust financial incentives, cutting-edge digital tools, and ongoing collaboration with industry players, Egypt is laying the foundation for a strong and competitive automotive sector that can meet global demands while benefiting from increased local production.
