The Volkswagen Group Africa and the Government of Egypt signed a new agreement to prepare a feasibility study for the construction and utilization of the Body Shop and Assembly buildings, which will be located within the East Port Said Car Zone (EPAZ) of the country.
Details
The new agreement was signed by the President of the General Authority for the Suez Canal Economic Zone, Waleed Gamal EldienCEO of the Sovereign Fund of Egypt. Ayman Soliman, Vice President of the East Port-Said Development Company. Dr. Ahmed Fikry and the President and CEO of Volkswagen Group Africa (VWGA), Martina Bien in the presence of the Prime Minister of Egypt, Dr Mostafa Madbouly.
A previous agreement laid the groundwork for joint efforts aimed at deepening the local establishment of the automotive industry in Egypt through a joint facility.
Zoom out
In June 2022, the Egyptian government announced the introduction of the Automotive Industry Development Program (AIDP), which aims to boost local value addition, increase vehicle production volume, boost and attract investment, and improve emission standards in the automotive sector.
Digging deeper
The Egyptian government aims to create a special purpose vehicle (SPV) to construct the buildings for the body shop and assembly line. Volkswagen Africa Group has expressed interest in using these facilities to assemble vehicles for the Egyptian market, following the successful completion of the feasibility study and its findings confirming viability.
What they say
Martina BienChairman and CEO of Volkswagen Group Africa (VWGA) commented:
“The new strategic partnership agreement with the Government of Egypt offers Volkswagen Africa Group a value-light investment model, which shifts the investment focus from capital expenditure to operational expenditure. The agreement also gives Volkswagen Africa Group the opportunity to advance its long-term plans to establish a presence in Egypt.
In addition, Volkswagen is strengthened by the willingness of the Egyptian government to explore a smart approach to realize the viability of the feasibility study. We are fully committed to working with the Egyptian government to make this project sustainable.“
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