Volkswagen Group Africa and Egypt Forge New Partnership to Advance Automotive Assembly
Cairo/Kariega – Following the success of their initial agreement in November 2023 to explore a joint automotive painting facility within the East Port Said Industrial Zone, Volkswagen Group Africa and the Government of Egypt have signed a new strategic cooperation agreement. This new pact aims to develop a feasibility study for constructing Body Shop and Assembly Line buildings in the East Port Said Automotive Zone (EPAZ) in Cairo.
This agreement marks a significant expansion of the collaboration between Volkswagen Group Africa and the Egyptian government. The signing ceremony, held during the Egypt-EU Investment Conference on June 29-30, 2024, in Cairo, was attended by notable dignitaries including Waleid Gamal Eldien, Chairman of the General Authority for the Suez Canal Economic Zone; Ayman Soliman, CEO of the Sovereign Fund of Egypt; Dr. Ahmed Fikry, Vice President of the East Port-Said Development Company; and Martina Biene, Chairperson and Managing Director of Volkswagen Group Africa. The event was also graced by the presence of Egypt’s Prime Minister, Dr. Mostafa Madbouly, and several key ministers and European Commissioner for Trade, Valdis Dombrovskis.
The groundwork for this expanded cooperation was laid by the initial agreement, which focused on deepening the localization of Egypt’s automotive industry through a shared facility. This initiative aligns with Egypt’s Automotive Industry Development Programme (AIDP) introduced in June 2022, aimed at enhancing local value addition, increasing vehicle production volumes, attracting investment, and improving emission standards.
Under the new agreement, a Special Purpose Vehicle (SPV) will be established by the Egyptian government to construct the Body Shop and Assembly Line buildings. Volkswagen Group Africa has expressed keen interest in utilizing these facilities for vehicle assembly, contingent upon the successful completion of the feasibility study and its confirmation of the project’s viability.
Martina Biene commented on the agreement: “This strategic cooperation with the Government of Egypt provides Volkswagen Group Africa with an asset-light investment model, shifting focus from capital expenditure to operational expenditure. It also allows us to advance our long-term plans to establish a presence in Egypt. We are encouraged by the Egyptian government’s innovative approach to ensuring the feasibility of this project and are committed to working together to make it a success.”
This new agreement not only strengthens the bond between Volkswagen Group Africa and Egypt but also underscores a mutual commitment to the development and growth of the automotive industry in the region.
