Volkswagen Group Africa is expanding its partnership with the Egyptian government and have signed a new agreement to look into building new Body Shop and Assembly Line facilities.
Following up on their progress from an agreement in November 2023, Volkswagen Group Africa and the Egyptian government have signed a fresh deal. This previous agreement was to explore setting up a joint automotive painting facility in the East Port Said Industrial Zone.
This new strategic partnership will focus on studying the feasibility of constructing and using new Body Shop and Assembly Line buildings in the same zone.
The agreement was signed by several key figures, including the Chairman of the General Authority for the Suez Canal Economic Zone, Waleid Gamal Eldien; the CEO of the Sovereign Fund of Egypt, Ayman Soliman; Vice President of the East Port-Said Development Company, Dr Ahmed Fikry; and the Chairperson and Managing Director of Volkswagen Group Africa, Martina Biene. The signing ceremony, held during the Egypt-EU Investment Conference in Cairo on 29-30 June 2024, was attended by Egypt’s Prime Minister, Dr Mostafa Madbouly, along with several other ministers and the European Commissioner for Trade, Valdis Dombrovskis.
The earlier agreement set the stage for deepening the localisation of the automotive industry in Egypt. It highlighted the Egyptian government's commitment to boosting its automotive sector. In June 2022, the Egyptian government launched the Automotive Industry Development Programme (AIDP) to increase local value addition, ramp up vehicle production, attract investment, and improve emission standards in the automotive industry.
The Egyptian government plans to create a Special Purpose Vehicle (SPV) to build the Body Shop and Assembly Line facilities. Volkswagen Group Africa has shown interest in using these facilities to assemble vehicles for the Egyptian market, depending on the feasibility study's positive outcome.
Martina Biene commented: “This new strategic cooperation with the Egyptian government provides Volkswagen Group Africa with a low-investment model, shifting the focus from capital expenses to operational expenses. It also allows us to move forward with our long-term plans to establish a presence in Egypt. We're encouraged by the Egyptian government’s innovative approach to make this project viable, and we’re fully committed to working together to make it happen.”
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