Egypt allocates $30mln to accelerate automotive industry in FY2025

Zawya

07-07-2025

Egypt has allocated EGP 1.5bn in its 2024/2025 state budget to advance the localisation of its automotive industry, a strategic move underscored by the inauguration of Sumitomo's largest global factory for automotive wiring harnesses in 10th of Ramadan City.
The Japanese manufacturer's new facility is expected to create around 10,000 jobs and serve as a key export hub for major European carmakers. Its opening reflects Egypt's broader efforts to deepen local manufacturing, reduce dependence on imports, and position itself as a regional leader in vehicle production and innovation.
The government's push to grow the automotive sector is part of its wider economic development strategy aimed at enhancing the investment climate and achieving industrial self-sufficiency. International confidence in this direction is growing. Fitch Solutions projects an uptick in Egypt's vehicle production in 2025, supported by expected exchange rate stabilisation and the easing of import restrictions. Meanwhile, the International Energy Agency has praised Egypt's progress in expanding production lines for electric vehicles and batteries—developments that are enabling more exports to the EU and encouraging local EV adoption.
The EGP 1.5bn allocation supports the National Strategy for the Localization of the Automotive Industry, originally launched in 2022. As of mid-2025, seven companies have joined the initiative, with three having already submitted invoices. An updated version of the strategy was approved in May and is set to take effect in July 2025.
This strategy is complemented by other major national initiatives, including the activation of the Automotive Industry Development Program (AIDP), which offers incentives to boost local value-added production. Egypt has also established the Supreme Council for the Automotive Industry and launched the Eco-Friendly Automotive Industry Financing Fund, under Law No. 162 of 2022, to further support sector growth.
Workforce development is also underway. In December 2024, the first batch of graduates completed the 'Android Automotive' programme—an initiative focused on building Egypt's capabilities in automotive software and smart vehicle technologies.
In terms of electric mobility, Egypt recently signed a contract to launch a joint stock company for the production of the country's first electric minibus. The model will seat 24 passengers, with an initial production target of 300 buses. A dedicated battery production line is also under development, with a projected annual output of 600 batteries by 2026.
Further investment is being directed into the Egypt Sat Auto project, with EGP 300m earmarked to produce a range of electric and conventional vehicles, buses, EV charging stations, scooters, and components.
Traditional vehicle manufacturing and assembly are also expanding. Among the notable projects is a Geely plant with two production lines and an annual capacity of 10,000 vehicles, 45% of which will be locally sourced. Al Nasr Automotive Company has achieved over 50% local content in its production of 300 buses annually. Meanwhile, the Egyptian German Automotive Company is producing 1,200 Mercedes vehicles and 3,000 Exeed vehicles each year.
Feeder industries are also gaining traction. Prometeon Tyre Egypt produces 1.1 million heavy truck tyres annually, with 70% destined for export and approximately 2,000 jobs created. Al-Mansour's vehicle filter plant, with over $10m in investments, manufactures more than 10 million filters each year.
At the heart of these efforts is Sumitomo's newly launched factory in 10th of Ramadan City—a flagship project that not only represents the company's largest facility worldwide but also underscores Egypt's growing role as a manufacturing and export hub in the global automotive landscape.