Q3 2020

REPORT
AUTOMOTIVE AFTERMARKET OVERVIEW

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WHAT’S HAPPENING REGIONALLY
Egypt holds a prominent position in the aftermarket landscape regionally, as it is
among the key players which include KSA and UAE. The retailing outlets and volume
shed light on the importance of Egypt as a market for the region across various
products including tyres, oils and batteries. The region held an optimistic forecast at
the beginning of the year, ending 2019 strongly and beginning 2020 with a positive
and optimistic forecast. Up until the pandemic started affecting the region by the
end of the first quarter. COVID-19 disrupted what otherwise was shaping to be
a thriving year.

The positive takeaway regionally is that even during the pandemic in 2020 Q2, many
regional markets still showed growth rates even if smaller than initially expected.
Which shows an obvious difference between the region’s forecast and the rest of the
world in the magnitude of the adverse impact.

CN: 1.2%
GH: 1.5%

ETH: 3.2% IN: 1.9%

6% or more
3% - 6% NG: -3.4% KE: 1%
0% - 3%
-3% - 0%
less than -3%
no data
EGYPT MARKET OVERVIEW
The Egyptian market shows a paradox of a challenging market yet full of potential
and unique strengths, even as it is hit by a pandemic still signs of continuity
and resilience prevail. It is still the only market within the region holding a positive
2020 forecast.

MENA | 2020 - 2019 Economic Outlook

GDP (annual variation in %) 2019

2020 Consensus Forecast
6
5.6
4 4.4

2.5 2.3
2 2.0 1.9
0.8 1.0 0.4
0

2-

4- 3.0- 2.6-
3.7-
4.0-
4.7-
6- 5.2-
5.6-
6.3-
8-

10-

12- 10.8-

14-

Lebanon Algeria Iraq Tunisia MENA Morocco Jordan Yemen Egypt

Source: FocusEconomics Consensus Forecast MENA | June 2020

• In 2019 declining inflation rates reaching a 9 year low of %3 and an average

GDP growth rate of %5 showed Egypt is growing more rapidly than the rest
of MENA.
• Total investment in automotive industry at USD 3 billion; USD 1.6billion in the
automotive industry and USD 1.4 billion in thefeeding industries.
• Despite Covid19- outbreak, in Q1 the vehicle market grew %28.3 and
GDP lowering yet still positive at %2.3 unlike the rest of the region
negative outlook
• Over 50 % of Passengers' cars in Egypt are over 15 years old, a true drive for
the local aftermarket
KEY FIGURES
Egyptian vehicle market reported an outstanding trend in the first two months of the
year, with sales growth at 61.9%, which then decelerated due to Coronavirus
outbreak, ending the first quarter still at a positive growth rate at 28.3%.

COVID impacted the consumers habits in the aftermarket as well with a trend
towards delayed car maintenance for tyres, oils and batteries

% of consumers who wanted to change, but

due to hygiene factors, did not feel safe to
visit garages/workshops:
TIRES OIL BATTERY

17% 13% 12%

Consumer confidence projected to recover in H2 2020:

Q4 2019 89

Q1 2020 99

Q2 2020 76

Q3 2020 78

Q4 2020 83

*Source: GFK
AUTO FEEDING INDUSTRY
• An important source of foreign currency for Egypt’s economy.
• Auto feeders are the second biggest exporter in the engineering industries
category, accounting for 27% of engineering exports in 2017.
• 500 automobile feeding companies in Egypt today, serving 16 assembly plants.

LUBRICANTS MARKET
Egypt is a prominent lubricant market across the region

No. of shops

15000
236 Mill Litres

10000

Oil Sales
157 Mill Litres
44 Mill Litres
5000

Egypt KSA UAE

*Source: GFK

Sales Litres % 2018 Sales Contribution %

%30 %30

%70 %70

Commercial Vehicles Passenger Cehicles Urban Rural

COMMERCIAL VEHICLES
Egypt is a growing market for commercial vehicles as the sector increased by a
massive 95% in 2018

Locally Produced Vehicles

Locally Produced Vehicles

Passenger
Commercial
60000

52100
50000

40000

30000
26670

19500
20000

9970
10000

2017 2018
*Source: GFK

In 2019, AMIC reported commercial vehicles is growing compared to 2018

Total Market Split

2018 till Nov 2019 till Nov

17% 19%

9%
11%

74% 70%

PC Buses Trucks PC Buses Trucks

*Source: AMIC
COMMERCIAL VEHICLES
Regionally, Egypt is a strong market player in commercial vehicles, as most of Egypt’s
auto exports are in the form of buses, while new CV sales ranking third in region at
43,569 vehicles in 2019 after Turkey and Saudi Arabia.

New CV Sales

120000

100000

80000

60000

40000

20000

Turkey KSA Egypt Iraq UAE Morocco Kuwait

*Source:TheGlobalEconomy.com
TYRES MARKET
• Passenger car tyre is the dominant segment in the country’s tyre market
followed by commercial vehicle tyre and two-wheeler tyre.
• Egypt OTR tyre market size is projected to grow at a CAGR of 4.0% during
2019-25, expected to be one of the fastest-growing OTR tyre markets in the
African region
• Independent aftermarket segment is expected to accelerate faster than the
OEM channels fuelled by the OTR tyre market and the growth in the
independent service centers
• Rural areas in Egypt are gaining more importance and contributing to the
tyre market

2018 Sales Contribution %

Urban
Rural

%11

%89

*Source: GFK
ELECTRIC VEHICLES
• Egyptian national strategy supports transformation to electric vehicles which
is bound to reflect on the aftermarket as more demand is created for the
batteries and powertrains required for EV
• A partnership agreement has been signed with China for manufacturing of
2,000 electric buses in Egypt
• A number of Chinese, Italian, and German companies have begun negotiating
with Egyptian institutions to supply power units
• Egypt is the first in the region to manufacture EVs
• For Infrastructure, Revolta, provides the largest EV charging network in Egypt
and North Africa through 130+ charging points covering 18 Egyptian cities
• The House of Representatives’ Energy Committee is drafting a law that will
regulate the import, sale, and after-sales services of all electric vehicles.
WHY BE PART OF AUTOTECH?
Autotech provides you with the ultimate platform to drive sales and build awareness
for your brand. Seize the opportunity to connect with trade professionals and provide
automotive spare parts and aftermarket solutions to one of the fastest growing
markets in the MENA region.

Learn more about your opportunities at Autotech:

www.autotechegypt.com