In recent years, Egypt has witnessed a notable transformation in its automotive industry, particularly in the local assembly of vehicles. As the country seeks to modernize and diversify its economy, its automotive industry is evolving to meet both domestic demands and global trends, particularly in vehicle manufacturing and electric mobility.
The government aims to develop this sector into an economic engine that drives employment and brings prosperity through exports, while reducing dependence on imports whose costs have soared. The government’s push to grow the automotive sector is part of its wider economic development strategy aimed at enhancing the investment climate and achieving industrial self-sufficiency. International confidence in this direction is growing.
The automotive industry in Egypt has been a state priority since the late 1950s, symbolizing national industrialization and economic prestige. Since the launch of the first locally manufactured car, Ramses, Egypt has attracted major international brands, including BMW, Jeep, and Mercedes-Benz.
Street traffic in Cairo.
Historical Context
The Egyptian government first entered the automotive sector in 1960 by establishing the state-owned Egyptian Automotive Company, which later became El Nasr Automotive Manufacturing Company in Helwan as part of President Gamal Abdel Nasser’s broader industrialization strategy. Production operations began in 1962, and the company initially launched Egypt’s first domestically manufactured automobile, the Ramses.
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Developed with support from the Ministry of Industry and based on the German-made NSU Prinz, the Ramses car was assembled through a combination of public investment and consumer pre-orders. Marketed as a symbol of national progress, the Ramses initially generated high public demand, but its production remained limited, estimated at five to six units per day, and quality issues emerged due to the absence of automated manufacturing tools such as body presses.
Following the launch of Egypt’s Open Door Policy, or Infitah, in 1974 under President Anwar Sadat, the 1980s saw a growing influx of foreign investment in the automotive sector. In 2010, Egypt's automotive industry reached a production peak of 116,683 vehicles, marking its highest output to date. However, the political upheaval of the Egyptian Revolution of 2011, also known as the January 25 Revolution, significantly disrupted the sector.
Current Market Dynamics
The Egyptian vehicle market boomed 43% in H1 of 2025. Brand-wise, Chevrolet grew 212.6% into 1st, followed by Nissan up 24.1%. Egyptian vehicle registrations are projected to rise to approximately 353,000 units by 2028, up from around 271,000 units in 2023. This marks an average annual growth rate of 4.2%.
On the production front, Egypt is expected to see a slight decline, with vehicle production estimated to reach about 56,000 units by 2028, down from roughly 57,000 units in 2023. This represents an average annual decrease of 0.2%. Since 2002, Egypt's vehicle supply has decreased by 3.7% annually.
Yet there are a host of challenges, not least an absence of foreign direct investment (FDI), questions over production quality, and limited domestic demand. Furthermore, the move towards localising car manufacturing comes in the wake of currency crises and declining purchasing power. Three years ago, a dollar cost EGP 15. Today, it costs nearer to EGP 50 (itself much improved from a recent high of EGP 70). This means that car prices have tripled, with sales of imported cars having shrunk significantly.
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At the same time, Egypt is attracting global brands. In particular, Chinese firms see the Egyptian market as a springboard into Africa and the Middle East. Several Chinese marques are preparing to begin local production in the coming months, among them MG, Jetour, GAC, Changan, Haval, and BAIC. Geely began production in January. Their arrival has been accompanied by tax incentives and support.
Cairo emerging as hub for Chinese automakers, with brands like Geely, MG and Chery investing in local factories to produce affordable cars for domestic and export markets.
Earlier this week, a grand ceremony was held in October City, a suburb of Cairo to mark the opening of a new factory by the Chinese automaker Geely. The event was attended by Egyptian Prime Minister Mustafa Madbouly and Geely Global Vice President Song Yun. The new Geely factory operates as a CKD (completely knocked down) facility, meaning it assembles cars from imported kits supplied by the automaker’s country of origin, utilizing local labor for assembly.
According to reports from Egypt, the factory will produce two models: the Geely Coolray and Geely Emgrand. In its initial years, production will remain relatively modest, with an output of approximately 30,000 cars annually, most of which are expected to serve the local Egyptian market.
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While opening a Chinese car factory producing tens of thousands of vehicles annually may seem like a minor development, SAIC-the parent company of MG-announced last month the launch of a local manufacturing plant in Egypt with a $135 million investment. This MG plant, also located in October City, will serve the local market and export vehicles internationally as well. Another grand ceremony was held in October City In November, attended by Egypt’s Trade and Industry Minister Kamal El-Wazir, marking the inauguration of a factory by EXCEED, a subsidiary of the Chinese automaker Chery.
On October 29, the Chinese automaker BAIC announced a binding agreement to establish an electric vehicle manufacturing plant in the suburbs of Cairo. The agreement was signed in partnership with the Egyptian government and the Egyptian EIM Group. The factory, which will span 1300 square feet, is set to be completed by the end of 2025.
By 2026, it is expected to produce 20,000 electric vehicles annually, some of which will be designated for export. That same month, reports in Egypt revealed that Al Amal Group, the distributor of BYD in Egypt, is working with the government to establish a local BYD factory to manufacture hybrid models.
Government Initiatives and Strategies
Egypt’s National Automotive Industry Strategy (NAIS) aims to boost local production, improve the legislative environment, provide financing, and encourage exports, with a focus on electric vehicles (EVs), but these grand ambitions face harsh realities, given that the industry still lacks the fundamentals necessary to become an export hub.
The EGP 1.5bn allocation supports the National Strategy for the Localization of the Automotive Industry, originally launched in 2022. As of mid-2025, seven companies have joined the initiative, with three having already submitted invoices. This strategy is complemented by other major national initiatives, including the activation of the Automotive Industry Development Program (AIDP), which offers incentives to boost local value-added production.
Egypt has also established the Supreme Council for the Automotive Industry and launched the Eco-Friendly Automotive Industry Financing Fund, under Law No. The opening of three car factories by Chinese automakers within weeks of each other represents the realization of a plan unveiled by the Egyptian government in January 2022.
The next phase of the program, expected to roll out in the coming years, involves offering incentives to Egyptians who purchase locally manufactured electric vehicles. The proposed incentive includes a 50,000 Egyptian pound (about $1000) subsidy and an exemption from annual vehicle registration fees.
The Egyptian government’s strategic plan was both detailed and ambitious. It promised government grants to local companies with roots in the automotive sector and partnerships with the Egyptian government to establish car factories.
Back in 2021, even before the official announcement of Egypt’s automotive manufacturing strategy, Prime Minister Madbouly met with representatives of Chinese automakers as part of a preparatory effort to establish these factories. In 2022, the Egyptian government launched the AIDP (Egyptian Automotive Industry Development Program), which has borne fruit over the past three months.
Electric Mobility
In terms of electric mobility, Egypt recently signed a contract to launch a joint stock company for the production of the country’s first electric minibus. The model will seat 24 passengers, with an initial production target of 300 buses. Egypt’s EV sector fell 21.3% in H1 of 2025. Despite the government’s intention to support EV adoption, electric cars are still less than 1% of the automotive sector. MG was the leader, up 4 spots into 1st.
Electric vehicle (EV) manufacturing has emerged as a key pillar of this strategy. Egypt aims to begin EV production in 2025, focusing on the domestic market and export-oriented public transport solutions. Pilot projects include e-taxis developed in collaboration with Chinese companies and Nasr.
As more consumers embrace electric vehicles, Egyptian automaker El Nasr is preparing to produce the country’s first domestically manufactured electric buses in 2025. Due to its strategic location at the crossroads of Africa, the Middle East, and Europe, Egypt is poised to become one of the leading producers and exporters of electric vehicles in the region, attracting substantial partnerships.
Challenges and Opportunities
Market estimates suggest that the total production of locally assembled cars in Egypt in 2025 will not exceed 60,000 units-a modest figure compared with other African countries such as South Africa (650,000 vehicles) and Morocco (530,000 vehicles, more than 60% of which are exported).
However, foreign companies remain reluctant to invest in Egypt. In 2024, Egypt emerged as the eighteenth-largest car exporter in Africa, trailing Libya and Ghana. This can be explained by the numerous challenges the industry encountered like political instability, currency devaluation, and global economic factors, all contributing to a decline in export volumes.
Despite investment momentum, challenges remain. A 2023 study by the German University in Cairo identified skills mismatches and weak labor-market alignment as major constraints, noting Egypt’s low global talent competitiveness ranking.
To fully unlock its automotive potential, Egypt must address these environmental challenges and ensure sustainable resource management. This text provides general information.
Shifting Focus
The primary difference between Egypt’s "old" and "new" automotive industries lies in their focus. The old industry mainly produced vehicles from Western automakers intended for the local market. In contrast, the new industry, dominated by Chinese automakers, is geared toward exports.
According to the presentation, Chinese automakers benefit from an automotive infrastructure that facilitates the transport of their products to African markets and the Suez Canal, six active export ports within a reasonable distance of Cairo, low energy costs subsidized by the Egyptian government and 0% VAT on foreign investments.
Egyptian students design car that runs on electricity and gas
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