A group photo showing Egypt s Minister of Petroleum Takre El-Molla along with the workers of the integrated fuel station (Photo courtesy of Egyptian petroleum ministry)
A memorandum of understanding (MoU) was inked on Wednesday, whereby the two companies agreed to assess production requirements, sales volumes, Al-Mansour Automotive Chairman Mohamed Mansour told Reuter on Wednesday.
The step also includes conducting a study on the incentives that might be needed from Egyptian the government, Mansour added, with explaining further.
"Government support of some kind, to see how we can work together. That will be a new capital investment that we make on our side, and of course, hopefully using Egypt as a hub to export to Africa," Mansour further said.
Al-Mansour Company and GM are expected to produce a study to be presented to the Egyptian government within the next 2-3 months, he noted.
Ahead of signing the MOU, the Egyptian government stressed in a meeting on Wednesday with the chairs of Al-Mansour and GM its readiness to provide a package of investment incentives to support the localisation of the automotive industry in Egypt.
"The government is ready to provide all possible investment incentives, not only to support the localisation of the automotive industry but also to transform Egypt into a regional and international hub for the automotive industry," Egyptian Premier Mostafa Madbouly told the meeting.
Madbouly revealed that the government is preparing to launch what he called "The Automotive Industry Strategy in Egypt" by the end of the current year, noting that the step is meant to consolidate the localisation of the automotive industry and auto feeding industries, with the aim of attracting more investments to that vital sector.
Details on the incentives Madbouly and Mansour mentioned are few, but Egypt already provides customs discounts for the companies and factories that work on assembling products components at home, in an effort to encourage the sought after industry.
At the other end, the Egyptian government is ready to provide buyers of locally made electric vehicles a subsidy worth up to EGP 50,000 (around $3,190), according to a previous TV statements by Public Enterprise Minister Hisham Tawfik in November.
As part of its goals to boost the reliance on renewable energy and achieve sustainable development, Egypt seeks to localise these environment-friendly cars, reduce dependence on fuels, and keep pace with global progress in the automobile industry.
In July, Egypt inaugurated the first integrated station in Cairo's Abbasiya district that serves vehicles running on natural gas, gasoline and electric charging, with plans to set up a network of 3,000 electrical-charging stations in near future.
The Wednesday’s announced plans came as the country was engaging in an advanced stage of negotiations with China’s Dongfeng Company to join the global trend of encouraging battery-powered car markets.
The production lines of state-owned El Nasr Automotive was due to locally produce the first-ever Egyptian electric vehicles in mid-2022 – but the negotiation was suspended in November.
The Ministry of Public Enterprise said both sides did not reach an agreement on the price of the imported component. The ministry announced later it has received offers from other partners.
During his meeting with Madbouly, GM President Steve Kiefer said his company plans to expand its activities in the Egyptian market during the coming period.
He added that GM seeks to increase its global investments by about $35 billion by 2025 so as to become a leader in the electric vehicle market.