The automotive industry is one of the world’s most prominent revenue-generating and fastest growing industries, comprising of manufacturers, suppliers, dealers, retailers and the like. The industry witnesses aggressive competition in every segment of its manufacturing process, various stakeholders seeking special means to reduce the business costs and increase revenues. There is also the continued need to standardize all activity procedures to ensure the benefits of specialization.
The earliest beginnings of the Egyptian automotive industry date back to the year 1960. During the socialist era, the government pledged to transform the country from an agricultural economy to an industrial one, and the first completely Egyptian car was produced. The car soon went out of production, as it was unable to compete with foreign brands, especially following the end of socialism and the move toward a more liberal market. It was not until 1985 that automotive giant, General Motors (GM), set up its first assembly plant in Egypt, revolutionizing the industry.
In the more than two dozen years since, the Egyptian automotive assembly business has grown from just three plants relying on mostly imported components, to 16 businesses with 26 assembly lines, manufacturing now near 100,000 annually of passenger cars, light commercial vehicles, trucks, and buses, as well as 300 factories that produce most automotive components (IDA’s Vision for the Automotive Industry Report). Besides GM, giants such as BMW, Nissan, Hyundai, and Daewoo produce a majority of their product line in their factories in Egypt. In fact, the BMW assembly line in Egypt is the only factory outside Germany where the BMW 7 Series is produced.
But it was not until 2004 that the Egyptian automotive market began to expand exponentially, along with the local production of both assembled cars and components. The total production market in Egypt consisted of only 49,335 vehicles in 2004. This figure rose to 116,683 vehicles in 2010; a 136% increase. However, due to the political changes starting in 2011, production was down over 31% in 2012. In 2013, Egypt was the third largest car-producing market in Africa, after South Africa and Morocco.
At Crowe Horwath Dr. A. M. Hegazy & Co., we provide extensive expertise pertaining to financial, managerial and advisory services for such industry. We have offered services to some of the leading automotive dealers such as Toyota, MCV & Mercedes Benz in tackling major challenges through our audit & accounting tools ensuring protection of the business funds & assets.
Based on extensive research, our team also deals with industry stakeholders to develop strategies to assist automotive companies/dealers with the skills required to maintain their levels of operations in the rigorous competitive field, while contributing to the value of the organization.