Mercedes-Benz To Make Cars In Egypt By Nov

German car maker Daimler-Benz AG will start assembling luxury cars in Egypt in November at a new 150 million ($45 million) plant majority-owned by longstanding local Mercedes-Benz agents NATCO.

The plant in Sixth of October City in the desert west of Cairo will start production at a rate of 2,500 Mercedes-Benz E-200s a year, executives of Daimler-Benz and NATCO (National Automotive Company) told a presentation on Tuesday night.

The cars, competing with locally assembled 5-series models from rival German company BMW, will sell for 298,000, said Sami Saad, chairman of the joint-venture production company Egyptian German Automotive (EGA).

Industry sources said this was 100,000 pounds less than the price of the equivalent imported model, on which the tariff rate is higher than for the completely knocked down (CKD) kits EGA will import from Germany.

 

Mercedes-Benz has been selling about 1,000 passenger cars a year in Egypt and is the leader in the luxury sector, with about 80 percent of the market, the executives said.

The local content of the cars will start at 40 percent, under current regulations the minimum needed if the CKD kits are to benefit from the reduced tariff rates, Saad said.

NATCO, a private company dominated by family interests, holds a 72 percent stake in the new joint venture, Daimler-Benz AG holds 26 percent, and two percent is owned by National International Trade (NAGRA), another private firm.

The executives denied that the decision to assemble in Egypt was in reaction to assembly plans by BMW, which said on Wednesday its first car would appear on June 18. Saad said they had needed to wait until they were sure they could meet the 40 percent local content rule without compromising on the quality of the final product.

The strong economic position (of Egypt), a rising standard of living, an open-door policy attracting investments, the removal of barriers like import licences