Minister of Industry:
- Increasing locally-sourced components in the final product and expanding into export markets should be at the heart of automakers’ strategies.
- Strengthening automotive supplementary industries through targeted incentives will be critical to unlocking the full potential of the Program.
Minister of Investment and Foreign Trade
- Linking export programs to real value added at the factory level will amplify their impact on the broader economy.
- The Program is a key lever for deepening domestic manufacturing, especially when fully aligned with the incentives offered to vehicle manufacturers under the Investment Law.
Minister of Finance
- We are offering investment, tax, and customs incentives to increase local components in the automotive industry.
Minister of Industry, Eng. Khaled Hashem, held an extended meeting with Minister of Finance, Mr. Ahmed Kouchouk, and Minister of Investment and Foreign Trade, Dr. Mohamed Farid Saleh, in the presence of the Economic Advisor to the Prime Minister, Dr. Jehan Saleh, to review the recommendations of the working group formed from members of the Supreme Council for the Automotive Industry and the Automotive Industry Unit to reassess Egypt’s Automotive Industry Development Program (AIDP).
This meeting marks the second within two weeks with automotive manufacturers, reflecting the Government’s commitment to giving this file strong momentum and encouraging manufacturers to increase production and exports. It also comes alongside several meetings held by Minister of Industry with a number of companies, including Mercedes-Benz Egypt, General Motors, and Nissan.
Eng. Hashem stated that over the past few days, the working group conducted a comprehensive and detailed review of all data and information related to AIDP, in addition to holding a series of meetings with various automotive manufacturers operating in the Egyptian market, as well as targeted companies. This was aimed at identifying manufacturers’ aspirations and needs, gathering their perspectives on the current business environment, and assessing their proposals to enhance the flexibility of AIDP and ensure its responsiveness to the rapid changes in this strategic industry, thereby positively impacting the increase of local content and the deepening of manufacturing, Minister of Industry added.
During the meeting, the needs of the automotive manufacturers, as well as the recommendations of the working group based on its review and compilation of these needs, were discussed. Key recommendations included (i) maintaining AIDP in its current form without change at this stage, especially as it already allows for periodic revisions every two years for fossil-fuel vehicles and annually for electric vehicles, with respect to production volume reduction points; and (ii) reviewing AIDP calculation mechanisms. Additional recommendations included studying the introduction of an export incentive to complement AIDP incentive package and any other incentives received by companies, provided that the total incentive package per vehicle does not exceed the prescribed maximum limit. Additional recommendations included examining the introduction of an export incentive to complement AIDP incentive package and any other incentives granted to companies, provided that the aggregate incentives per vehicle do not exceed the prescribed ceiling. Another recommendation called for extending the coverage of the Investment Law to include the automotive sector and its supplementary industries, while permitting the combination of applicable incentives. It was further recommended to include hybrid vehicles under the AIDP’s 10% environmental compliance incentive category, without altering their current customs classification or the applicable 30% tariff rate.
Minister of Industry also emphasized the need for automotive manufacturers to focus on increasing locally-sourced components in their products and promoting exports to markets abroad, noting that most of the manufacturers’ needs are already accommodated within AIDP.
He further indicated that Ministry of Industry will consider introducing incentives for automotive supplementary industries as a key pillar for the success of AIDP, with the aim of establishing a fully integrated local manufacturing base that relies primarily on domestic products, thereby enhancing the competitiveness of the Egyptian industry and meeting the requirements of future expansions.
On his part, Minister of Investment and Foreign Trade affirmed that the development of Egypt’s automotive industry represents a central pillar in strengthening the industrial base and boosting exports, noting that Egypt aims to build a competitive manufacturing base capable of integrating into regional and global automotive value chains.
He added that AIDP provides a clear and incentivizing framework for companies to increase locally-sourced components in the final products and further domesticate manufacturing, with a focus on attracting investments in automotive supplementary industries and associated value chains, thereby contributing to expanding the automotive industry’s production capacity and enhancing its competitiveness.
MIFT Minister also underscored that the Government’s efforts to reinforce the investment incentive package directed at the automotive sector. He added that, by virtue of Prime Minister Decree 503/2026, the automotive industry and its supplementary industries have recently been included among the activities eligible for incentives under Investment Law 72/2017 in sectors (A) and (B). He noted that this measure enhances Egypt’s investment attractiveness and facilitates the expansion of production and export capacities.
In turn, Minister of Finance affirmed that the Government of Egypt places the advancement of the automotive industry among its top priorities. This is manifested in AIDP, which is based on providing investment, tax, and customs incentives linked to the actual performance of manufacturers, relying on local component ratios, production volume, and export levels. He noted that all incentives allocated to the automotive industry in Egypt will be covered by AIDP, thereby facilitating investors’ ability to calculate the total incentive package they will get when they increase their local manufacturing capabilities, rely more heavily on local components, and increase their exports to markets abroad.
