(MENAFN- Daily News Egypt) By Adel Hamdi
The Automotives Division in the Giza Chamber of Commerce expects car prices to increase by up to 5% due to the US dollar's rising exchange rate against the Egyptian pound.
The continuing rise in the US dollar's value will contribute to a decrease in car sales in the first quarter of the year.
Omar Balbaa Chairman of the Automotives Division in the Giza Chamber of Commerce said that car prices are currently unstable.
He said the dollar increase resulted in shrinking sales in addition to increasing car costs noting that customers are waiting for the dollar rate to decrease.
If the dollar exchange rate keeps increasing against the Egyptian pound the total costs of the domestic and imported cars will increase at the same rate of dollar.
He demanded that the Central Bank of Egypt (CBE) and Ministry of Finance quickly do a study to put a limit on the dollar exchange rate.
Balbaa said the only solution to the automotive market's recovery in Egypt is to revive the domestically produced spare parts and accessories industries. He added that domestic components in the automotive industry amount to 45%. There is a governmental study on increasing the domestic component and consequently creating job opportunities for youth.
Balbaa estimated the number of companies assembling their cars in Egypt to be 18 factories including all vehicles (passenger cars trucks and buses).
Omar Al-Abyad Board of Directors member of the General Division of Automotive Agents Distributors and Traders expects an increase in car prices during 2015. He added that there is currently a disruption in the car market due to the dollar increase.
Al-Abyad expects market prices in the spare parts and accessory assembling plants in Egypt to increase up to 2.5%. This will come in addition to an increase in the imported products of up to 5% should the dollar exchange rate maintain its rise.
He added that companies are ready for the car price increases and that moreover some companies already announced that they will increase their prices.
This increase will affect automotive sales Al-Abyad added leading to a significant decline in the customers at up to 30% adding that customers will take time to adapt to the new prices.
He continued saying that a customer buying a car for EGP 150000 and finding an increase in the number later will not purchase which will affect sales.
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