Egyptian Strategy Towards Electric Vehicles - MIH · Egyptian Strategy Towards Electric Vehicles....

Egyptian Strategy Towards

Electric Vehicles

About the Egyptian Ministry of Public Business Sector

Companies Under Management

8 Holding Companies

118 Subsidiaries

299 Joint Ventures


Sectors of Activity

Chemical Industries : Fertilizers, Tobacco, Tires, Shoes, Springs,

Salt, Paper, Manganese

Metallurgical Industries : Steel, Aluminum, Cars and Trucks and

Busses, Glass, and Porcelain; Mining

Pharmaceuticals Production, Packaging, Trading, and

Distribution

Cotton : Trading, Ginning, Spinning, Weaving, Dyeing and Finishing

Touristic Services, Hospitality & Hotels Development, and Retail

Stores

Real Estate, Construction, Agriculture, and Cattle Raising and

Slaughtering

Containers Handling, Shipping, Warehousing, Passenger and

Goods Intra City Transport, and Foreign Trade Business

Development Services

Insurance, Re-insurance, Real Estate Assets Management, and Strategic

Investments


Companies` Structure

In June 2018, the Ministry of State Owned Enterprises of Egypt has embarked on a

reform program for the entire 8 holdings and 118 subsidiaries.

The beginning was a SWOT analysis done for companies and discussed in lengthy

meetings with companies` boards, with the objective of setting priority sectors and

companies for reform, to stop the drainage of public money caused by major loss

making companies, some of which already reaching negative net worth.

Those included 24 companies accounting for more than 90% of the entire sector

losses. Reform plans for around 40 companies have been designed, and are under

implementation. Reforms are taking place in three main areas:

1. Restructuring companies and rehabilitation of factories

2. Availing resources to finance reform, through the utilization of unutilized

assets

3. Regulatory, managerial, governance, capacity building and business

reforms


The Reform Program


The Reform Program

Tailored training programs to raise human resources

skills

Developing Companies`

organizational Structures

Reviewing Wage Structures &

Standardizing labor Regulations

Reviewing wage structure for Executives

Reviewing basics for selecting and

rewarding Board of Directors in Joint

Ventures

Reviewing basis for Remuneration in

Companies (Profits Share) to enhance

motivation

Debt settlements and financing development

Changing land use in

Residential Areas

Database of Unutilized

Assets

Partnership with the Private Sector

Determining the needed

Requirements for Restructuring

Performance Evaluation for

Executives

Centralized Marketing and sales departments in Holding Companies

Revision of Charter of Accounts & Criteria for

Cost Based Pricing

Digital Transformation and automation of business

processes (ERP)

Amendments to Law 203Laws

& Regulations

Efficient use for Assets

and Resources

www.mih.eg5, Tolombat St., Garden City, Cairo, Egypt

Tel: (202) 27954844 - 27954833Fax: (202) 27957221 - 27962079

• AL- Nasr automotive company Incorporated on 824k m2 Inauguration the

automotive industry in Egypt in 1960. it Introduced commercial vehicles,

buses and tractors shortly after passenger cars production commenced.

• In 1999 the company was split segregating the commercial vehicles operation

under a new entity Engineering Automotive Company EAMCO, and the rest

of operations under NASCO.

8

Al-Nasr Automotive Manufacture CO. (NASCO)

9

Al-Nasr Automotive Manufacture CO. (NASCO)Overview

o Al-Nasr Automotive Manufacture Company specialized in the production & sale ofpassengers cars and manufacture of spare parts and manufactured manycomponents like sheet metal forming pressed parts, drivetrain parts, gearboxes,seats and trim parts, etc..

o Operated under different license agreements with OEMs like Fiat, and Tofas andmanufacture assembly for others customer.

10

Al-Nasr Automotive Manufacture CO. (NASCO)Facts & figures

o Paid in capital of EGP350 Mn, fullyowned by the MetallurgicalIndustries Holding (Ministry of PublicBusiness Sector)

o Land: 482,000 m2

o Built up area: 155,301 m2

o Work force: 118 (reached 12,000)

o Location: Helwan 24 km south eastof Cairo

11

Al-Nasr Automotive Manufacture CO. (NASCO)Premises

12


Fact

ory

No

.5:

Too

l Ro

om

13


Factory No.6: Parts Machining

Factory

Covered area: 32,813 m2

Machines mechanical parts related to

gearboxes, axels, engines, etc.

14

Factory No.7: Pressing Factory

Covered area: 14,733 m2

Presses automotive body panels, differential casings, other non-

automotive parts (whitegoods bodies)Press up to: 1000 tons


15

Al-Nasr Automotive Manufacture CO. (NASCO)Product Lineup historical amounts

Nasr 1100

12,094

Nasr 1300

6,270

Nasr 1500 & 2300

2,096

Nasr 4X4

515

Product Yearly ProductionMax. Capacity

16


Nasr 125

15,553

Nasr 131

10,783

Nasr 133

28,244

Nasr 128

142,991


17


Nasr Tempra

2,352

Nasr Sahin & Dogan

80,240

Nasr 126

3,261

Nasr Florida

342

Current Capacity for production lines on 3 shifts basis 36 K/year, expandable up to 72 K/year

Total amount: 304,741

Al-Nasr Automotive Manufacture CO. (NASCO) Ghamra Service Center

o NASCO is offering Repairing and maintenance services for all types of cars includingthe reforming processes in Ghamra with covered area 10.877 M2

19

Engineering Automotive Manufacturing CO. (EAMCO)

20

Engineering Automotive Manufacturing CO. (EAMCO)Overview

o EAMCO was founded in 2000 on activity of Lorry, buses, diesel engines and agricultural tractors manufacturing.

o EAMCO is specialized also in the production and sale of spare parts and Vehicle Service maintenance.

21

Engineering Automotive Manufacturing CO. (EAMCO)Facts & figures

o Paid in capital of EGP 64,5 Mn,fully owned by the MetallurgicalIndustries Holding (Ministry ofPublic Business Sector)

o Land: 342,000 m2

o Built up area: 295 m2

o Work force: 1257

o Location: wadi Hof – Helwan –Cairo

22

Engineering Automotive Manufacturing CO. (EAMCO)Premises

Factory No.1: Trucks &

Agri. Tractors Factory

Assembling of different types oflight, medium and heavy trucks,buses Chassis and agriculturaltractors.

Covered area: 49k M2

23


Factory No.2: Engines Factory

Production , assembling andtesting of air-cooled engines forlorries and buses


24


Factory No.3: Buses

Factory

Build of different types of buses bodies such as: tourist, heavy, inter city, within cities buses, mini-buses, midi-buses

and microbus


25

Engineering Automotive Manufacturing CO. (EAMCO)Product Lineup current capacity

All Buses

4500


Bus capacity 43-47, with 3 shifts 900 per year.

Mini Bus capacity 29, with 3 shifts 1800 per year.

Midi Bus capacity 33, with 3 shifts 1800 per year.

26

Engineering Automotive Manufacturing CO. (EAMCO)Product Lineup current capacity


Heavy trucks, with 3 shifts 900 per year.

medium trucks, with 3 shifts 1800 per year.

Light trucks, with 3 shifts 1800 per year.

pickup trucks, with 3 shifts 3600 per year.

27

Agricultural tractors , with 3 shifts 3600 per year.

Agricultural

Tractors

3600 8100

Trucks

Engineering Automotive Manufacturing CO. (EAMCO)Service Centers (Helwan branch)

o EAMCO is offering Repairing and maintenance services for all types of cars, buses and trucks including the reforming processes in Helwan and Alexandria Branches.

First Helwan branch

28

Engineering Automotive Manufacturing CO. (EAMCO)Service Centers (Alexandria branch)

o Second Alexandria Branch

29

Engineering Automotive Manufacturing CO. (EAMCO)Alexandria branch Services

AC

Works

Paint Works

Mechanics Works

The Electricity

Works

UpholsteryWorks

Overhauls engines

30

31

Service centers and Showrooms

The metallurgical industries holding (MIH), its Holding sister companies and their subsidiariesown various service centres and showrooms in Cairo and Alexandria governorates .

Alex

Show rooms

6

Service centres

5

Cairo

Show rooms

22

Service centres

19

32


33


ALKAN OVERVIEW

34

ALKAN holding was founded in 1974. Growing since then to become one of Egypt’s leading business corporation ALKAN holding owns several subsidiaries aggressively engaged in multiple business fields.

FIELDS OF OPERATION →

- Aviation- Automotive- Construction- Earth Moving- Engineering- Geographic Information System- Information Technology- Marine- Material handling- Medical- Power- Real Estate development- Spinning- Telecom & Network- Travel & Tourism

ALKAN OVERVIEW

ALKAN HOLDING

TRADING OPERATIONS

TOURSIM & AVIATION

MANUFACTURING

OPERATIONSREAL ESTATE OPERATIONS

CIT OPERATIONS

ALKAN TELECOM

ALKAN NETWORK

ESRI NORTHEAST

AFRICA

ALKAN REALESTATE

CITADEL PLAZA

ALKAN TEXTILE

ALKAN AIR EIM GROUP

35

36

ALKAN HOLDING PARTNERS

ALKAN OVERVIEW16 COUNTRIES SUBSIDIRIES

37

ALKAN HOLDING

ALKANUAE

ALKAN & IRAQ

ALKAN CIT LIBYA

ALKAN ALGERIA

ALKAN SIERRA LEONE

ALKAN GHANA

ALKAN TANZANIA

ALKAN KENYA

ALKANNIGER

ALKAN SENEGAL

ALKAN SUDAN

ALKAN M. NOSSEIR(SAUDI)

ALKAN OMAN

EIINIGERIA

ALKAN BURKINA FASSO

ALKAN JORDAN

EIM Group was established in

1979

It hosts more than 2,500 employees

EIM exists in 16Governorates with more than 28 locations around the nation (517,000 sqmof work space) With its exceptional nationwide Geographical penetration EIM has provided one of the fundamental tools of market penetration to all it’s brands

1. Grand Cairo : 8 Branches + (HQ)

2. Alexandria : (5 Branches)

3. Mansoura

4. Wadi El Natroon

5. Suez

6. Arish

7. Sharm El-Sheikh (2 Branches)

8. Hurghada

9. Marsa Allam

10. El Menya

11. Asyut

12. Sohag

13. Luxor

14. Edfo

15. Aswan

16. South Valley (Toshka)

EIM OVERVIEW

38

EIM GROUP SUBSIDARIES

EIM GROUP

EITEIM CO.

ALKAN MEDICAL

ALKAN TRAVEL

EII

AIM JORDAN

39

40

EIM GROUP BUSINESS DIVERSITY

Marine & Light Vehicles:-Yamaha

-Doosan

-Twin Disc

-Cummins Onan

Commercial Vehicles-Hyundai Commercial Vehicles

-Yutong Busses

Materials Handling:-TCM

-BP Battioni & Pagani

Automotive:-Renault Egypt - EIM

-KIA Motors – EIT

-Renault Jordan - AIM

ALKAN Medical:-GE

-Xerox

-Stryker

-Sirona

Travel & Tourism-ALKAN Travel

Construction Machinery:-Komatsu-Bomag-Dowin-Mustang

Power Systems:-Cummins “Power Generation (CPG)”-Cummins Engines-Renewable Energy

EIM Turbo & Oil Supply:-Garrett

-Cummins Turbo Technologies (Holset)

-BorgWarner Turbo Systems

-Cummins Filtration (Fleet guard)

-EIM-Shell Oil

41

EIM GROUP PARTNERS

42

VISIONOur vision is to be the first and best choice for consumers and a benchmark in

customer’s satisfaction.

MISSIONCustomer satisfaction is our primary commercial principle we obtain it throughproviding and developing “integrated solutions”. “operational efficiency”, And“delivering the highest levels of performance excellence”.

EIM is developing sophisticated, efficient distribution and servicing networks.Moreover, delivering solutions that fits and suits our client’s requirements at acommercially competitive and financially viable price. Thus, expanding itsmarket, and securing the desired return on investment for its shareholders andprinciples.

VALUESWe are committed to invest and develop our employees as they are the

company’s most valuable resource, our clients

satisfaction & Our Corporate Social Responsibility (CSR) role towards our

community & country development.

EIM GROUP VISION, MISSION & VALUES

EIM AUTOMOTIVESALES PERFORMANCE

43

44

EIM GROUP:

• EIM was assigned as Renault official importer in Egypt since 1979; Renault is the No. 1 European brand in Egypt Offering:

✓ Range of 7 models✓ Competitive Prices✓ A network of 68 Outlets nationwide✓ Premium Service

• EIT was assigned as KIA official importer in Egypt since 2006; KIA is the No. 1 selling brand in Egypt Offering:

✓ Range of 5 models ✓ Competitive Prices✓ A network exceeding 53 Outlets nationwide✓ Premium Service

Sales:

• FY18 RENAULT sales was 18,400 units and MS is 12.6% +3.1 pts Vs. FY17 9.5%, mainly coming from (Kadjar & Duster models)

overachievement

• FY18 KIA sales was 9,398 units and MS is 6.4% +0.6pts Vs. FY17 5.8%, mainly coming from (Cerato model) overachievement

Products:

• Heavily depended on Duster, Logan and Sandero/Stepway which represent xx% of total sales in FY18. → Kadjar is a key model as a

Hero car for Renault and SUV segment.

• Satisfying market demand by introducing lineup in each segment starting with Pegas (B-Sedan) till Sorento (D-SUV) and Carnival

(D-MPV)

EXECUTIVE SUMMARY

44

RENAULT SALES PERFORMANCE – 9 YEARS

Models 2011 2012 2013 2014 2015 2016 2017 2018 Total

LOGAN 4171 6004 4017 5619 10665 11472 2281 4093 48322

SANDERO 727 1565 1940 571 852 1822 498 486 8461

STEPWAY 204 1126 802 1633 4123 5361 1153 3136 17538

MEGANE PLAY 308 100 408

MEGANE GC 60 617 936 1613

MEGANE HB 121 45 48 161 38 128 58 599

CAPTUR 4 24 814 347 843 2032

DUSTER 800 563 235 852 1810 1653 2265 4007 12185

KADJAR 1 973 2077 4838 7889

MCV 503 433 91 24 79 47 1177

FLUENCE 1717 1609 1089 2644 2139 1367 10565

ESPACE 4 4

TWIZZY 2 2

DOKKER 103 103

SCALA 698 698

LODGY 1 187 134 3 325

OTHERS 58 58

Total 8,999 11,345 8,222 11,508 20,002 23,900 9,500 18,50345

KIA SALES PERFORMANCE – 9 YEARS

Models 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total

PICANTO 2,379 1,195 2,794 2,150 1,685 1,151 765 435 60 12,614

RIO 1,609 242 3,163 1,955 3,640 2,294 935 265 219 14,322

CERATO 9,286 3,655 5,213 2,418 3,578 3,822 3,665 3,085 3,716 38,438

OPTIMA 1 7 9 3 48 28 96

Cadenza 47 18 1 66

K900 8 1 1 10

Ceed 652 681 49 350 1,732

Sportage 124 808 3,327 3,125 4,456 4,379 4,043 1,557 4,678 26,497

Sorento 107 33 25 11 31 19 6 4 5 241

Mohave 92 47 139

Soul 410 356 492 173 424 688 815 125 120 3,603

Carens 8063 5045 5236 2680 2521 1698 900 204 191 26,538

Carnival 53 22 46 8 27 31 11 21 30 249

Total 22,171 11,428 20,305 12,532 16,410 14,734 11,821 5,746 9,39846

TOTAL NETWORK OUTLETS & FACILITIES

Ain Sokhna

3S Facilities

Showrooms

ServiceCenters

PartsOutlets

Total

EIT 4 12 3 - 19

Dealer 2 13 26 6 47

Total 6 25 29 6 66

47

August 2019

Egypt at a glance2015/2016 2016/2017 2017/2018 2018/2019

Real GDP growth rate 4.3% 4.2% 5.3% 5.6%

Inflation rate (CPI urban) 10.9% (Jan. 2016) 28.1% (Jan. 2017) 17.1% (Jan. 2018) 8.7 % (July 2019)

Population 89 Mn (Jul 2015) 91 Mn (Jul 2016) 97.6Mn (Sep. 2018) 99.079 Mn (Aug.2019)

Net FDI (USD bn) 6.9 7.9 7.7 4.6 (Jul.-Mar.2018/19)

International Reserves (USD bn) 17.5 (Jun. 2015) 31.3 (Jun. 2016) 44.5 (Oct. 2018) 44.9 (July 2019)

Unemployment Rate (%) 12.5 (2016) 11.8 (2017) 8.9 (2018) 8.1 (Q1 2019)

Doing Business Rank 122 (2017) 128 (2018) 120 (2019) 120 (2019)

Global Competitiveness Report Rank

115 (2016) 100 (2017) 94 (2018) 94 (2018)

2

WhyEgypt?

▪ Gate to Africa & the Middle East

▪ Center of the World

Location

▪ Central location & proximity to the global market

▪ Access to a large consumerbase in Egypt and beyond

▪ Large pool of trained and skilled labor

▪ Revamped infrastructure base

▪ Abundance in natural resources

▪ Competitive tax rates

▪ Growing economy

50







▪ Growing economy

Population

99.1million

WhyEgypt?

51







▪ Growing economy

FTAs

▪ COMESA▪ GAFTA▪ EUEgypt▪ QIZ

▪ Aghadir▪ EFTA▪ Egypt Mercosur▪ Egypt Turkey FTA

6

WhyEgypt?







▪ Growing economy

▪ Over 29million

▪ 60% under30▪ Competitive wages

LaborForce

7

WhyEgypt?







▪ Growing economy

Transportation

▪ 20Airports

▪ 191 Railway stations

▪ 15 Seaports & SuezCanal

▪ Subway network 8

WhyEgypt?







▪ Growing economy▪ 174.6 km Road Network

▪ CommunicationNetworks

9

WhyEgypt?

Transportation







▪ Growing economy

Mineral & Renewable Resources

WhyEgypt?

56







▪ Growing economy

IncomeTax

%22.5

WhyEgypt?

57







▪ Growing economy

▪ Economic Indicators

▪ InternationalRanking

WhyEgypt?

58

FDI in EgyptGDP Growth Rate

Source: Ministry of PlanningSource: CBE

US

Db

illi

on

EconomicIndicators

Sovereign Credit Rating

Revised Egypt’s Sovereign Credit outlook being “Positive” in Nov. 2016 & “B”(Stable) in May2018

Last rated Egypt’s Sovereign Credit outlook as “B2” (Stable) in April2019

Last rated Egypt’s Sovereign Creditoutlookas “B+” (Positive) in May 2019

15

▪ The legislative reforms are pivotal in any economy reform process, in order to complement the

macro-economic ongoing reforms. Hence, full-fledged Legislative Reform plan is taking place, of

which some laws are amended and some were newly decreed such as :

- New Investment Law.

- Insolvency & Debt restructuring law.

- Sole Partnership Companies.

- Commercial Registry Law.

- Commercial Companies Law.

- Mortgage Law and Capital Market's Law.

- Bankruptcy law.

Reforms are underpinned by actions aimed at improving the legislative framework of investment…

Legal / Regulatory Reforms

Investment ClimateReforms

Highlight of the new Investment Law

Investment Protection Guarantees

62

Tax and Non-Tax Incentives

Transparent Rules for Allocation of State- owned Land

Out-of-courts Forums to Settle Investor- state Disputes

Facilitated Licensing Procedures

InvestmentIncentives

General Incentives▪ All investment projects, except free zone projects, shall enjoy the following general incentives for a period of

▪ Exemption from Land RegistrationFees.

• 5 years:▪ Exemption from Stamp Duty Tax and Notary Public Fees on:

- Registration of the constitutional documents of a company.- Loan agreements.- Pledge contracts.

▪ Unified Flat Customs Duty Rate fixed of 2% on equipment andmachines required for setup.Special Incentives▪ The new investment projects and the expansions for companies established according to the investment law,

shall be allowed to a special incentive represented in a tax redemption according to the following criteria;

63

Investment Incentives –Cont’

▪ projects located in the areas that are much in need for development .(upperEgypt, Red Sea ,

golden triangle, Sinai, New valley ,& SE ZONE)

▪ The 50% shall be calculated of the Investment cost of theproject.

▪ The 50% will be deducted from the taxable net profit Over 7years.

▪ Projects located in the rest of the country.

▪ 30% of the investment cost of the project. ,Shall granted for the following

activities: Labor-intensive projects.- SMEs

- Renewable energy projects.

- Tourism projects as specified by the SIC.

- Electricity projects specified by the SIC.

- Vehicle and related feeders industry projects.

- Wood, furniture, printing, packaging and chemical industries.

- Antibiotic, cancer treatment and cosmetics.

- Food and agricultural products as well as agricultural wasteprojects.

- Engineering, mineral, textile and leather projects.

Reduction shallnot exceed 80% of the paid-up capital at the project start

date.

Incentive period

will not exceed 7

years from project

start date.

Establish a new company during the 3 years following the executive regulation ..

Not to use the assets of any existing

company.

Keeping regularand

accurate books.

ZoneA- TaxDeductionof50%

ZoneB- TaxDeductionof30%

64

Streamlining InvestmentProceduresIn

ve

sto

r S

erv

ice

Ce

nte

r

▪ Special ‘Investor StateCenter’ in GAFI tofunction as a one-stop-shop.

▪ Establish/liquidate companies.

▪ Ratify BOD, OGMand EGM

▪ Issue all kind oflicenses Capitalincrease/reduction.

▪ Representatives fromrelevant authoritieswill exist in thiscenter, and will havepowers to issue approvals.

▪ The Law provides forthe automation of suchservices ASAP.

Acc

red

ita

tio

nO

ffic

es

GAFI to assistinvestors to reviewand apply forproject’s licensesand permits.

▪ It willcertificate

issue that

is and

investor financially technically compliant.

▪ GAFI will accept the certificate and issuerequired licensewithin 60 days.

▪ Non-reply will beconsidered animplied approval.

Go

lden

Lic

en

se

▪ Private sector service ▪ Strategic projects providers licensed by and PPP project in

infrastructure,renewable energy,

ports canestablished

transportation or beand

operated by virtueof a single licenseto be issued by the Cabinet.

Fa

cili

tati

ng

Ex

itP

roce

du

res

▪ 120 days from

receiving

liquidation request.

▪ Concerned

authorities are

required to advise of

any liabilities which

are due.

▪ If no

notification

such

has

been received then

the company is

anydischarged of

liabilities

65

Investors ServiceCenterAs part of Egypt's Investment Law's new reformist measures to cut red tape and

improve the ease of doing business. The Investor Service Center operates as a

resource hub that offers a complete package of consultations, advice and information

about available investment opportunities in Egypt.

ISC services include:

¬ Company Establishment Services: The ISC provides services related to

establishing companies and their branches, approving the minutes of their boards

of directors and their general assemblies, issuing approvals and permits, and

allocating the necessary real estate for the establishment of projects.

¬ Government Relations: The ISC will act as a liaison between entrepreneurs and

governmental entities providing resources, advice and procedural assistance to

start-ups.

¬ Legal Services: The ISC provides legal advice and notary services for investors.

¬ MIIC and GAFI have launched e-establishment, e-signature and call center to

facilitate establishing companies; i.e., companies to be completely established

online.

¬ There are 8 branches in Cairo, Alexandria, Asiut, Ismailia, 10th of Ramadan, 6th of

October, Sohag and Gamasa.

66

InvestmentLandscapeThe new Law grants the establishment of investment zones, private free zones, as well as technologyandspecialized economic zones by Cabinet decree.

Free Zones

▪ No taxes and customs

▪ No import / export regulations.

▪ All equipment, machinery and

essential means of transport

necessary for business

operations are exempted from

all customs, import duties and

sales taxes.

▪ Investment clusters in

different fields and sectors,

where investors are granted

services to serve the local

market , where GAFI shall

be responsible to obtain all

licenses , permits and

approvals on behalf of the

investors.

Investment Zones

▪ Technological zones can be

created for specialized

activities in the fields of

industry, logistics, and

information and

communications.

▪ Free customs.

Technology Zones Special Economic

Zones

▪ The Suez Canal Economic

Zone (SE Zone) is a world-

class free zone and trade

hub.

▪ It is considered as zone A

in the investment law

which enjoys 50% tax

deduction .

▪ Free Customs.

InvestmentRegimes

KeySectors

Agribusiness Engineering and

Electronics

HealthCare Logistics Mining ICT Petrochemicals

Pharmaceuticals Real Estate & Construction

Retail Textile Tourism Renewable Energy

Automotive

68

Vote of Confidence

69

InvestmentMap

▪ 360-degree view on the investment climate and investment opportunities in Egypt

▪ Present public and private investment opportunities in Egypt

▪ Present overall investment climate in Egypt

▪ Present existing investments and highlight success stories

▪ The Ministry of Investment and International Cooperation launched the second edition of Egypt's investment map.

http://www.investinegypt.gov.eg/English/Pages/explore.aspx?map=true

70

http://www.investinegypt.gov.eg/English/Pages/explore.aspx?map=true

New Administrative Capital

The new administrative capital will strengthen and diversify the country’s

economic potential by creating new places to live, work and visit for 7 million

people.

1.5 Million Acres

To restore Egypt's status as a major agricultural state, this project will expand

agricultural land by 20% in an effort to achieve full self-sufficiency of crops.

The Golden Triangle

The Golden Triangle, a new economic zone located between Qena, Safaga and

Al Qusair, is considered one of the richest areas in mining sources accounting

for 75% of Egypt’s mining minerals.

Egypt Mega Projects

71

New Alamain CityThe Al-Alamein region is now being developed to become a second Alexandria

and will offer investment opportunities in tourism, healthcare, logistics,

agriculture, industry, education and energy.

Damietta Furniture CityDamietta Furniture Complex is set to boost the furniture industry in Egypt,

which is

currently one of the fastest growing sectors.

Egypt Mega Projects

72

El Galala CityThe development of Al Galala City is one of the largest Egyptian development

projects. The city is located on the highest mountain plateau between Ain Sokhna

and Zafrana and overlooks the Red Sea Coast .

Suez Canal RegionThe Suez Canal Economic Zone is aimed at becoming a global trade hub and is

projected to generate US$ 12 billion annually.

AUTOMOTIVE MARKET EVOLUTION

73 73

HIGHLY CROWDED ROADS

HOT CLIMATE

MARKET CHARACTERIST

ICS

VERY BAD ROAD CONDITIONS

HIGH RUNNING COST OF FUEL PETROL RON 92

AUTOMATIC GEARBOX

STANDARD SPECS

REQUIREMENTS

ENTERTAINMENT ON BOARD

STRONG AIR-CONDITIONING

REINFORCED SUSPENSION

< = 1.6 LITER ENGINE

HIGH TAXATION

EGYPTIAN AUTOMOTIVE-LOCAL REQUIREMENT, A MUST TO SUCCEED

74

NO. BRAND Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 TOTAL 2018

1 HYUNDAI 1,388 356 1,765 988 1,373 1,571 1,256 1,683 2,086 3,090 1,304 1,113 17,973

2 RENAULT 777 1,123 1,450 975 1,547 1,204 1,186 1,815 556 1,738 1,547 3,047 16,965

3 KIA 733 93 582 676 123 243 805 649 1,097 1,477 1,587 1,304 9,369

4 TOYOTA 302 84 932 780 267 634 611 439 718 1,126 1,096 92 7,081

5 OPEL 0 922 548 316 674 319 708 189 300 299 586 945 5,806

6 MISTUBISHI 203 298 400 272 730 610 592 650 551 325 161 64 4,856

7 NISSAN 274 134 263 178 539 503 745 321 325 306 335 453 4,376

8 FORD 357 237 286 213 370 236 484 380 564 218 251 98 3,694

9 FIAT 263 260 200 232 60 585 167 189 458 364 421 340 3,539

10 SANYOUNG 0 290 0 247 295 0 496 355 350 394 193 529 3,149

11 MERCEDES 319 329 425 207 147 24 2 5 828 245 309 0 2,840

12 PEUGEOT 270 128 0 10 42 394 595 139 431 496 293 0 2,798

13 VW 263 100 178 165 103 139 213 305 190 222 30 90 1,998

14 MG 0 3 0 0 0 0 0 319 0 576 537 476 1,911

15 BAIC 598 48 508 0 505 0 0 80 0 0 0 0 1,739

16 SUBARU 50 58 129 167 139 90 183 194 253 72 115 266 1,716

17 GLORY 0 0 150 200 280 300 298 339 0 0 56 1,623

18 SEAT 60 236 22 119 175 83 217 0 335 77 180 9 1,513

19 JAC 0 153 0 101 152 104 148 48 240 60 168 168 1,342

20 SKODA 0 250 89 183 73 158 0 97 42 204 156 32 1,284

21 GEELY 0 0 0 0 0 0 0 0 504 499 250 0 1,253

22 JEEP 138 96 128 95 30 169 126 116 84 14 25 0 1,021

23 CHANGAN 69 0 182 67 55 50 0 100 204 50 182 48 1,007

24 SUZUKI 0 60 0 0 104 6 0 263 248 265 0 30 976

25 MAZDA 0 0 0 26 82 0 100 71 0 482 142 0 903

26 CHEVROLET 0 161 0 60 46 21 232 2 10 137 132 0 801

27 VOLVO 50 21 59 64 35 57 49 84 56 22 72 33 602

28 CITROEN 31 71 33 19 93 0 0 87 141 17 41 14 547

29 CHEERY 540 0 0 540

30 AUDI 124 72 23 1 0 32 23 6 12 53 6 62 414

Renault No. 2 KIA No. 3 in Importation from the CBU Total Importation year 2018 was 106,078 Units

75

TOP 30 IMPORTERS BY BRAND IN 2018

Source: CUSTOMS

25.4% 21.6% 18.7% 15.6% 7.3% 4.2% 2.6%

37,047

27,798

24,127

21,181

9,428

5,436 3,303

Total TIV PC - LCV : 127,246 UnitsOther Brands (18,640 Units /15%)

100% CBU

100% CBU`

100% CBU

100% CBU

100% CKD

100% CBU

97.7%CKD2.3% CBU

59% CKD41% CBU

80% CKD20% CBU

100% CBU

47% CKD53% CBU

100% CBU

100% CBU

100% CBU

6.2% CKD93.8% CBU

96.3% CKD

3.7% CBU

EIM 2nd LARGEST AUTOMOTIVE GROUP IN 2018

76Source: AMIC Reports

7,239

4,261

10,489

10,874

2,845

16,384

13,814

8,746

981

16,565

9,764

12,731

2,424

7,823

4,834

1,501

89

7,778

-

6,744

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Others

SD-C

SD-B

SUV-C

Segment mix: top segments (56% of TIV) dominated by Japanese & Korean brands

Europe Japan Korea US China

MARKET UNDERSTANDING


Source: AMIC Reports

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (F)

Total Industry Volumes 205,521 248,917 176,157 200,252 195,869 268,006 294,806 324,287 294,806 193,885 170,000

Passenger Cars 158,926 192,848 133,165 144,123 133,760 187,264 205,990 226,589 205,990 145,886 128,000

Commercial Vehicles 46,595 56,069 42,992 56,129 62,109 80,742 88,816 97,697 88,816 47,999 42,000

46,595 56,069 42,992 56,129 62,109 80,742 88,816 97,697 88,816

47,999 42,000

158,926

192,848

133,165 144,123 133,760

187,264 205,990

226,589 205,990

145,886 128,000

205,521

248,917

176,157

200,252 195,869

268,006

294,806

324,287

294,806

193,885

170,000

• PC market was down by (31%) in 2011 due to the revolution.

• PC market went up by 8% in 2012.

• TIV 2019 FC will be same as 2018 as an optimistic forecast or lower down by 10 to 15% Vs. 2018

Revolution Years

AUTOMOTIVE MARKET OVERVIEWTIV SALES 2018-2019

78


AUTOMOTIVE MARKET OVERVIEWTIV SALES 2018-2019

56,069 42,992

56,129 62,109 85,010 82,847

56,288 36,102

47,999 57,599

192,848

133,165 144,123 133,760

207,973 195,559

141,983

99,530

145,886

175,063

248,917

176,157

200,252 195,869

292,983

278,406

198,271

135,632

193,885

232,662

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (F)

Commercial Vehicles Passenger Cars Total Industry Volumes

1st Revolution

2nd Revolution

CBE New Regulation

Political Stability

Devaluation of EGP

Zero % Customs

79

AUTOMOTIVE MARKET OVERVIEW

80

TOTAL MARKET IN JULY 2019 VS. JULY 2018

Source: AMIC Reports81

Total Market volume for the month of July 2019 was lower than July 2018 sales by -5.61% from 16,907 to 15,958 unitsThe passenger cars segment had a volume decrease of -8% in units, when comparing July 2018 to July 2019The Buses segment had a volume decrease of -13.7% The trucks segment had a volume increase of 9.9%

TOTAL MARKET SPLIT YTD 2019 VS. YTD 2018


Total Market volume YTD 2019 was lower than YTD 2018 sales by -6.58% from 16,907 to 96,381 units TO 90,042The passenger cars segment had a volume decrease of almost -10% in units, comparing YTD 2019 vs. YTD 2018 The Buses segment had a volume increase of 0.1%The trucks segment had a volume increase of 4%

TOTAL MARKET JULY 2019 SALES ANALYSIS IN VOLUME


Performance in July 2019 sales is higher than 2019 YTD average, 2018 YTD average and June 2019 sales.But lower than 2018 average and July 2018 sales. 2018

TOTAL MARKET BY BRAND – JULY 2019 VS. JULY 2018 IN VOLUME (TOP 13)


TOTAL MARKET BY BRAND – JULY 2019 VS. JULY 2018 IN MARKET SHARE (TOP 13)


TOTAL MARKET BY BRAND – YTD 2019 VS. YTD 2018 IN VOLUME (TOP 12)


TOTAL MARKET BY BRAND – YTD 2019 VS. YTD 2018 IN MARKET SHARE (TOP 12)


PASSENGER CARS MARKET

88

PC MARKET SPLIT JULY 2019 VS. 2018 IN VOLUME


In the month of July 2019, the overall total PC market decreased by -8% from 12,471 to 11,499 units

PC MARKET SPLIT YTD 2019 VS. YTD 2018 IN VOLUME


The overall total PC market decreased by -10% from 69,901 units to 62,810 units

PC MARKET JULY 2019 SALES ANALYSIS IN VOLUME


Performance in July 2019 sales is higher than 2019 YTD average, 2018 YTD average and June 2019 salesBut lower than 2018 average and July 2018 sales

CBU

CKD

Pass

enger

Cars

CBU

CKD

Pass

enger

Cars -19%

-10%

CBU

CKD

Pass

enger

Cars

CBU

CKD

Pass

enger

Cars

-4%

PC MARKET YTD JULY 2018 VS YTD JULY 2019


CBU

CKD

Pass

enger

Cars

CBU

CKD

Pass

enger

Cars

CBU

CKD

Pass

enger

Cars

CBU

CKD

Pass

enger

Cars

PC MARKET YTD 2019 VS 2018 BY BRAND ORIGIN


Source: AMIC Reports 94

SEGMENTS MARKET SHARE YTD JULY VS YTD JULY 2019

YTD (July) 2018 (69,901 Units) YTD (July) 2019 (62,810 Units) -10%

• C-Sedan Segment continues to decrease in number of units but still has the same market share and

C-SUV Segment increased by 2%.Analysis

M/S 16% 15% 12% 12% 9% 6% 5% 5% 3% 3% 2% 2% 2% 8%

-45%

47%

-30%

-7%

-56%-31%

-1%

-14%

3%-37%

372%

-16%

PC MARKET RANKING YTD JULY 2018 VS YTD JULY 2019

Source: AMIC Reports 95


PC MARKET RANKING YTD JULY 2018 VS YTD JULY 2019CBU ONLY

96

M/S 19% 18% 17% 10% 8% 4% 4% 4% 3% 3% 2% 2% 6%

55%

-1%

-56%

-72%

3%

-23%

-19%

-47%

-37%

27%

372%

PC SALES BY BRAND YTD DEC 2018- CBU+CKD


• PC Market YTD DEC 2018: 145,886 Units (+50%)• The overall total PC market increased by 47% from 99,530

units to 145,886 unitsNote: Passenger Cars Full Year 2018 of 145,886 units is including BYD & Lada Total Sales in 2018of 8,927 units

97

PC SALES BY BRAND YTD DEC 2018- CBU ONLY


• PC CBU Market YTD DEC 2018 increased by 30% 68,726 Units

98

PC SALES BY BRAND YTD DEC 2018- CBU BY M/S


AUTOMOTIVE BRANDS CKD STATUS IN EGYPT

100

101

MERCEDES BENZ

• The CEO of Daimler Co. Markus Schafer & The Egyptian President Abdelfattah EL Sisi haveannounced a long term relation to start producing Mercedes Benz vehicles in Egypt again after itstopped in 2016 , it will start with a new Factory under it’s Sole Agent in Egypt to serve SeveralModels they are planning to introduce in Egypt to strengthen there lineup.

• Mercedes Benz said that they are looking forward for this partnership with Egypt and seeing it as apromising Market for them and want to increase the market share, return to the game again and restore it’sposition which has been lost since years.

• Mercedes will produce 2 of their Models from The USA Factory in the New Egyptian Factory as a startDue to the high demand from Several Regions on there Models and they will secure the demand when theystart production in Egypt.

• Ittihadiya welcomed the announcement, saying it is “a step that reflects the improvement of theinvestment environment and the performance of business in Egypt.”

102

CHERY

In 30th July, 2019- GB Ghabbour Auto has celebrated the production of Chery “Arrizo 5” through its manufacturing plant in Abu Rawash industrial zone. The local assembly of Chery “Arrizo 5” is part of the company’s expansion plans in the Egyptian auto sector and its commitment.

GB Ghabbour Auto offers Chery Arrizo 5 in three trims: Baseline (Manual and Automatic) and Highline (Automatic). Chery Arrizo 5 is covered for 5-years or 100,000 km warranty, whichever comes first

The locally assembled Chery Arrizo 5 relies on a DVVT 4-cylinder engine with a 1,499 cc engine capacity, producing 114 HP at 6150 rpm and 141-newton meter torque at 3800 rpm. The baseline is offered with a 5-speed manual transmission while the highline is equipped with a 7-speed automatic transmission.

103

KIA

After the Success of EIT The Sole Agent ofKia in Egypt with Korean side to startproducing the Big SUV Kia Sorento (SUV – D)which in fact took less than 1 Week afterMeeting the Egyptian Minister of Industry &The Model (Sorento) has been confirmed withthe Kit & selling price as well, it wasintroduced in the Egyptian Market before Endof 2018., EIT Succeeded to take it’s secondModel which is a Small Car in Segment B tostart producing during 2019 Year.

104

PROTON

• Proton Delegation has held Positive talks with The Minister of Industry Amr Nassar in the previous Week & they are willing to produce locally the Proton Saga with a Mass volume & Cheaper price.

• Note: The Car has been introduced in the Egyptian Market December 2018.

105

MG

• MG has agreed with it’s Sole Agent Mansour last year to start producing MG ZS the competitorof Duster in Egypt during 2019 & they will start to assemble the CKD version in Egypt

• Moreover the MG RX5 the competitor of the Kadjar will follow in the plan to be introduced as aCKD Model in the next year 2020 , as they are seeing that the SUV is a promising and verygrowing segment to invest in due to high market demand.

❑ In alignment with the United Nations Sustainable Development Goals (SDGs), and in

accordance with Egypt’s Vision 2030. Egypt is committed to both reducing emissions

of Green House Gases (GHG) to curb climate change and reduce local air pollution

emissions for the sake of public health.

❑ The Egyptian government plans to increase the use of alternative fuels to reduce

dependence on conventional fuels, such as gasoline and diesel, by introducing electric

and hybrid vehicles in both public and private transportation.

❑ President Abdel Fattah El Sisi has requested the localization of Electric Vehicles

industry.

❑ A national strategy for transformation to Electric Vehicles has been launched, with the

contribution of various related ministries.

❑ A partnership agreement has been signed with China for manufacturing of 2,000

electric buses in Egypt by the Ministry of Military Production in cooperation with a

Chinese company (Foton), and agreement has been made to deliver 50 electric buses to

Egypt later this year.

The Egyptian Strategy to Produce and

Introduce

Electric Vehicles

National strategy

4 Pillars implemented through

3 Strategic phases

Expanding Electric cars manufacturing

Increasing local inputs to

production

Expanding in Export Markets

Enabling

Infrastructure

Introducing

Incentives

Deeping

Manufacturing

Shifting to Renewable resources

Stage 1Stage 2 Stage 3

Expansion planTargeting 1000 Charging

Point in 2020

Already signed for 400 new

locations (including 50 with

Shell) RevoltaEgypt

The Supporting Infrastructure

Needed to Enhance Demand

The Revolta Case

Current status87 charging stations; including:

20 Fast Charging Point

(50 KW)

67 Regular Charging Point

(22 KW)

General incentives:

▪ All investment projects (except for free zone projects) benefit from general

incentives under law 72.

▪ These incentives include:

1. A fixed 2% customs fees on all imported machinery and

equipment.

1. Exemption from stamp tax and registration fees on all

incorporation contracts, finance and mortgage contracts for 5

years from registration on the commercial registry.

Government Investment

Incentives

Government Investment

Incentives

Investment projects established within three years after the

issuing date of law no: 72 are entitled to:

• A tax exemption of up to 50% on investment costs in the developing

areas (zone A- underdeveloped geographical areas specified at the

investment map).

• A tax exemption equal of up to 30% of the investment costs in the

more developed areas, up to a maximum of 80% Of The Paid Up

Share Capital (ZONE B-ALL OTHER AREAS).

• (Labor- intensive projects- small and medium- which depend or produce

new or renewable energy- electricity production or distribution –

tourism-export projects-industrial - etc.)

Special Incentives:

Government Incentives

for the First Investor in the Field

❑ Providing infrastructure needed for fast charging stations:It is proposed to provide a lump sum 25 thousand pounds per station to motivate Companies

establishing the first 2000 charging stations, accurately distributed throughout the country.

❑ Encouraging supply and demand for locally manufactured electric

vehicles:

o It is proposed to provide a lump sum of $ 6,000 to $ 7,500 for the first 100,000 locally

produced electric vehicles, to be distributed as follows:

o 66.7% of the owner of the car, after a distance of 20,000 km, spent in stages, in a period

not exceeding two years.

o 33.3% for the factory, provided that the local component is not less than 40%. Guarantee

the purchase of 4000-5000 cars annually to replace cars owned by ministries and

government agencies, for a period of five years.

o Setting a limit on the percentage of new licenses granted to gasoline taxis, and opening them to

electric cars

Ministry of the Public Business Sector

seeks to localize

the electric car industry By

❑ Cooperating with China in the field of electric cars

Manufacturing, especially in light of their experience and

advanced technology in the industry.

❑ Providing the necessary support for investments in the

field to keep pace with the current global trends shifting

towards environmentally friendly electric cars.

❑ Satisfying the domestic market and then export to the

global market, benefiting from the agreements signed

with other countries in this area.

Egyptian Strategy Towards Electric Vehicles - MIH · Egyptian Strategy Towards Electric Vehicles....

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