Egyptian Vehicle Market in the first half of the 2017 was down near 50% killed by economic recession, skyrocketing vehicles prices, huge unemployment, austerity reforms. The trend will not change as in July VAT will sharp increase.

Egypt’s economy looks to be on the mend, and the Central Bank recently felt confident enough to lift restrictions on foreign exchange transfers. The move should make it easier for firms to import inputs and boost industrial production, which is already booming so far this year following a dire performance in calendar year 2016.

However, ordinary Egyptians are hurting and have shouldered a large part of the burden of recent reforms; inflation is eroding purchasing power, while unemployment, particularly among the young, is still worryingly high. Price pressures are likely to be stoked further by a second fuel subsidy cut in June.

Following two years (2014 and 2015) of high sales volume, in the 2016 the domestic vehicles market dropped down, hit by the impressive increase in the vehicles key-on-hand price and his trend has not changed starting the new year with the market really negative.

Moreover, Egypt has announced that it will bring forward to 1 July 2017 a 1% VAT rise to 14% while the original plan had been to raise VAT on 1 October 2017. VAT was introduced in Egypt at 13% on 1 October 2016, replacing the 10% Sales Tax and was presented as an action to improve the efficiency of tax collections and broaden the tax base. In case of vehicle with over 2.0 HPs VAT rate will be higher than the base.

So vehicles price and new taxes are really killing vehicles demand and the market is expected to lose near the half of the 2016 volume.
Indeed, according to the data released AMIC, in the first half of the 2017 total vehicles (cars and commercials) sales have been only 56.660 down a huge 50.7%.

At brand-wise, Nissan has taken the market leadership with 11.289 sales (-9.2%) overtaking Chevrolet that has lost a sharp 60.2% at 10.068 units and Hyundai with 7.396 sales (-62.0%).

Original Source : Focus2move.com

Ily Es

 Translator