Cairo – Car prices in Egypt are expected to witness further reduction starting from January 2020 in tandem with the implementation of the final tranche of tariff reductions on imported cars from Turkey with a 60% local component requirement.
The prices of three car models, namely Toyota Corolla, Fiat Tipo, and Renault Megane, will decrease early 2020, local car agents said.
The three car models will enjoy zero percent tariff by the beginning of the coming year, after a 90% tariff reduction last January, the chairperson of the Egyptian Automotive Dealers Association, Osama Aboul Magd, told Mubasher.
The reduction will range from EGP 6,000 to a maximum of EGP 10,000, he noted.
Egypt and Turkey signed the Free Trade Agreement (FTA) in December 2005 and the agreement entered into force in March 2007.
The agreement states on the gradual phasing out of tariffs on Egyptian and Turkish imports and exports.
Aboul Magd expects car sales to drop marginally to 170,000-180,000 cars during the fourth quarter of 2019, when compared to the same period a year earlier.
He ascribed the decline in car sales to “Let It Rust” campaign that called for boycotting car purchasing to force traders to reduce auto prices after customs duties on European-made vehicles have been decreased to zero.
For his part, Walaa Megahed, founder of Deals Auto, expects that cars under the Free Trade Agreement between Egypt and Turkey will be reduced by EUR 300-600.
By 2020, car sales are forecast to increase significantly on the back of the appreciation of the Egyptian pound against the US dollar and the implementation of zero tariffs on cars imported from Turkey, Megahed noted.