Recently, imported European and Turkish cars coming into Egypt have become exempted from customs, reviving a sales movement in the local market. However, this may not be the case for other brands, seeing that tax free cars from Europe and Turkey are a serious competitor for China. Therefore, Chinese carmakers need to find solutions to benefit from the local market’s revival.
Khalid Saad, general manager of Brilliance Egypt, the agent of Brilliance China in Egypt, said his company intends to cut the prices of its cars, due to the stability of the Egyptian market, as they carefully studied the market trends.
Chinese car companies, for the new year, did not reduce car prices in anticipation for market conditions improving, Saad explained. He noted that the recent drop in car prices is not solely due to custom removals of Turkish cars, but also to the decline in exchange rates.
Saad expected that the fierce competition between Chinese, European, and Turkish car brands would prompt local agents to demand parent companies in China to reduce their prices or rely on local assembly, so that they can release new vehicles at competitive prices.
Egypt-China cooperation in the field of public transportation and their competitive prices increase the local market’s confidence in Chinese car companies and their leadership in automotive technology.
In a related context, an official source at a Chinese car company’s local agent said that competition has become difficult in the market, after the lifting of customs on European and Turkish cars.
However, there are several factors that influence the Egyptian consumer’s decision to buy a new car other than the prices, as they also prefer companies with a good reputation and nationwide service centres.
Car operating costs
Low costs of operating, including periodic maintenance and spare parts, availability of service centres, and vehicle longevity are of interest to car owners and are advantages. Egyptian customers, said the source, are now more concerned about these factors than they are car prices, which significantly affects car sales and gives some advantage to Chinese brands.
Despite the price difference between Chinese and non-Chinese cars, Chinese cars still maintain a strong hold in the Egyptian market due to the superior luxury that they offer in the same price category.
The source denied that Chinese companies would offer any discounts in the coming period because they have already adopted new price offers in the last period, and their prices are reasonable.
On a different note, he commended the Egyptian government for its cooperation with China in the field of mass transportation.
He believes that this cooperation would support Chinese brands in the local market, especially since Egyptian-Chinese cooperation in the field of public transport proves that Chinese cars are of high quality and are a leader in heavy-duty vehicle technology.
Mohamed Hendy, head of Marketing at Geyushi Motors Group, the local agent of the Chinese FAW brand, said customer satisfaction ensures continuity and competition for any car brand, and this can be achieved through focusing on after-sales services, expanding service centres, and making spare parts available at competitive prices. Therefore, after-sales services will be the gateway of Chinese cars to maintain their presence in the local market.
In addition, the luxuries offered by Chinese cars would also enable them to achieve good sales, despite the fact that several high-quality European and Turkish brands joined the price categories that used to be dominated by Chinese cars.
Hendy believes the current price cuts of some cars would increase the severity of competition for Chinese brands, but they are ultimately in favour of final consumers.