Eight foreign car companies have suspended production to their agents in Egypt at a time when producers globally are suffering from a scarcity of production due to supply chain disruptions, other than the e-chip crisis, as a result of the repercussions of the Russian-Ukrainian war and the Corona pandemic.
A number of international factories have decided to direct dealer stakes in Egypt to other markets that may accommodate quantities of different brands.
One European car dealer who holds the largest share of the middle class, said that most foreign companies stopped supplying their shares to their agents in Egypt during the last two months, explaining that the parent companies fully understand the current economic situation, quoted the Egyptian newspaper "Money"
He added that although the demand for cars has declined locally and globally, the production rate of different brand factories is lower than the volume of market orders, which opens the way for the diversion of shipments produced to other markets.
He explained that the biggest affected by the conversion of production are local agents for reasons related to the difficulty of persuading companies again to allocate quantities to markets in Egypt in the event of a breakthrough in imports.
He stated that all the countries of the world are going through an exceptional economic situation, which he described as difficult, because of the negative repercussions of the Ukrainian war, which makes all entities and companies global and local fully understand the circumstances surrounding, demanding the need to announce a clear direction on imports for a specified period of time so that agents can reconcile their situation with them.
In the same vein, one of the authorized distributors of several European brands revealed the trend of a number of international car companies to stop producing and exporting their models to the local market during the coming months of June and July, due to the failure of their local agents to pay the financial dues for these shipments.
The distributor confirmed that some agents of European car brands, including Citroën, Volkswagen, Skoda and Seat, Audi, Peugeot, Fiat and DS, notified their distributors of the lack of total quantities and shares supplied to them, allegedly that the parent factories stopped producing them for Egypt within the next two months.
He explained that all car dealers and importers are experiencing significant difficulties in import work through the inability to contract any new shipments with international companies for a period of two months now, due to the procedures and restrictions imposed on import operations, expecting the gap between supply and demand mechanisms to widen significantly within the market, and coinciding with the depletion of inventory at local agents in the coming weeks.
Another distributor pointed out that the external markets where a number of local car dealers work will be the lifeline in the face of the disposal of shipments produced from parent companies, while maintaining the quantities agreed with international factories.
He said that some local agents are directed to re-export their quantities of production to the Gulf states, using the UAE and Jordanian markets to be a regional re-export center for the region's markets.
He predicted that the size of egypt's automotive market will shrink by more than 50% in the coming months, with declines gradually increasing due to a lack of inventory of different models.
The automotive market is likely to see a number of small traders exit in the coming period, unable to obtain quantities to sell, with large medium-sized companies able to hold on for a while.