GB Auto said that the CAPEX budget for 2022 is expected to be within the range of EGP 550m and will be focused mainly on complete knock-down (CKD) lines to prepare for the government incentives programme, a source told Daily news Egypt
The total passenger car market in Egypt witnessed strong growth during 2021, growing by 25.2% y-o-y from 167,792 units in 2020 to 210,000 units in 2021.
GB Auto’s Management expects the passenger car market in Egypt to grow by 10-15% in 2022, bringing units sold to approximately 240,000 units.
The company expects their passenger car sales to reach 55,000 units during 2022, bringing their market share up to 22.8%.
The semi-conductor chip shortage is expected to continue throughout the first half of 2022 and start easing gradually over the second half.
GB Auto have somehow overcome this shortage by contacting five brands from four different countries — Korea, China, Czech Republic, and Japan — to help them diversify their suppliers.
A strategy that the company has adopted with suppliers is over ordering, requesting more than what is needed and then negotiating down to the actual target amount.
Due to the semi-conductor chips and the large increase in freight costs (nearly 200% increase, according to management), a price increase in passenger cars is expected to be witnessed by March-April 2022.
The company has been looking for a substitute for three-wheelers for the past three months, approaching the Minister of Military Production in the process to see if the ministry has the capability of assembling and adding local value to three-wheelers.
GB Auto’s management also expressed that this approach is convenient for them as that way they can be granted the license to distribute three-wheelers without any bans. A response for this approach is expected by the end of the first quarter of 2022.
