Egypt’s Drive Towards Automotive Localisation: A Strategic Leap
Strengthening Industrial Logistics
Egypt is embarking on a transformative journey to deepen automotive localisation as part of a broader strategy aimed at strengthening its industrial logistics framework. This ambitious plan places a spotlight on expanding exports and attracting foreign investment, with a considerable emphasis on developing the automotive sector. The government’s strategy is not just about enhancing domestic capabilities but also about positioning Egypt as a competitive player in the global market.
The National Automotive Industry Development Programme
Prime Minister Mostafa Madbouli has underscored the importance of the National Automotive Industry Development Programme, which is set to draw major international manufacturers to Egyptian shores. During a recent meeting with ministers from industry, finance, and foreign trade, Madbouli highlighted the plan’s goals: creating a robust industrial base to meet increasing domestic demand and support export growth. A significant component of this initiative is the focus on electric vehicles (EVs) and their components, aligned with global clean energy trends. By doing so, Egypt not only aims to modernise its transport sector but also contributes to the global shift towards sustainability.
Enhancing Competitiveness
According to Cabinet Spokesman Mohamed el-Homsani, the overarching strategy seeks to boost the competitiveness of Egyptian industry on both regional and international fronts. The recent discussions included an analysis of the current market share of electric vehicles, projected growth rates, and proposals from international companies looking to invest. Various incentives are being considered to encourage local manufacturing and fortify supply chains, which are crucial for the success of the automotive sector.
Free Zones as Logistics and Export Hubs
Critical to this strategy is a focus on enhancing Egypt’s free zones as logistics and export hubs. By October 2025, the number of projects within these zones is anticipated to reach 1,237, amounting to a total capital investment of $14.3 billion and providing jobs for approximately 245,000 workers. These free zones play a pivotal role in industrial production, storage, and trade-related services, making them invaluable to Egypt’s economic landscape.
Minister of Investment and Foreign Trade Hassan El-Khatib revealed that Egypt’s nine public free zones currently host 1,019 projects with an investment cost of $38.5 billion. The performance metrics for exports in 2024 are promising, highlighting $11 billion in commodity exports, $7 billion in service exports, and $6.5 billion from the petroleum sector. These figures illustrate the importance of free zones in enhancing outbound logistics and strengthening international trade.
Targeted Development Sectors
El-Khatib further noted that priority sectors identified for development within free zones include automotive components, logistics services, port development, information technology, pharmaceuticals, food processing, textiles, and energy solutions. This holistic approach aligns industrial policy with transport and trade infrastructure planning, ensuring a cohesive development strategy that benefits multiple sectors within the economy.
The Integrated Industrial Steel Complex
In a parallel development, Deputy Prime Minister and Minister of Industry Kamel El-Wazir met with Malu Chang, the CEO of Shin Feng Steel, to discuss an ambitious $10 billion integrated industrial steel complex set for construction in Egypt. This facility will produce a staggering 10 million tonnes of automotive and industrial steel annually, incorporating hot and cold rolling, galvanising, and advanced processing lines.
The steel complex is designed to support not only the automotive sector but also the energy and infrastructure domains. It will rely on local iron ore and renewable energy sources, showcasing Egypt’s commitment to sustainable manufacturing practices. The project is projected to create 15,000 direct jobs and an additional 85,000 indirect jobs, significantly contributing to local employment. Moreover, it aims to reduce reliance on imports while increasing export capacity, further reinforcing Egypt’s strategic position as a regional manufacturing and logistics hub.
By undertaking these initiatives, Egypt is poised to transform its automotive sector while enhancing its overall industrial landscape. The combination of localised production, a commitment to sustainability, and a focus on both domestic and international markets paints a promising picture for the future of the country’s industrial ambitions.