{"id":103945,"date":"2022-11-16T05:32:51","date_gmt":"2022-11-16T05:32:51","guid":{"rendered":"https:\/\/alj.com\/?post_type=perspective&p=103945"},"modified":"2022-11-16T05:32:51","modified_gmt":"2022-11-16T05:32:51","slug":"eyes-on-egypt","status":"publish","type":"perspective","link":"https:\/\/alj.com\/en\/perspective\/eyes-on-egypt\/","title":{"rendered":"Eyes on Egypt"},"content":{"rendered":"

Egypt \u2013 once the cradle of one of the world\u2019s most advanced and powerful ancient civilizations \u2013 has the latent potential to be one of the largest automotive markets in the Middle East and North Africa region, but its potential has so far been unfulfilled.\u00a0 Is this beginning to change?\u00a0 We spoke to Tarek Abdullatif<\/em><\/a>, Country Director Egypt, about the evolving Egyptian automotive market, his 30+ years with Abdul Latif Jameel Motors, and his plans to lead the business through its next phase of growth.<\/p>\n

It\u2019s over three decades since Tarek Abdullatif joined Abdul Latif Jameel<\/a>, but his passion for the business and his vision for the future is as strong now as when he first joined in 1991.<\/p>\n

\"\"
Tarek Abdullatif
\nRegional Director, Egypt
\nAbdul Latif Jameel Motors International<\/figcaption><\/figure>\n

He was straight out of Cairo University, Egypt, where he studied business management, when he saw a recruitment advertisment for Abdul Latif Jameel.\u00a0 He\u2019d heard of the brand and knew it was a big company, so he applied and got the job, working as a Lexus salesman for Abdul Latif Jameel Motors in Saudi Arabia.\u00a0 At that time, the company was already a well-known name in its home market, but its global footprint was still developing.<\/p>\n

By 1995, Tarek\u2019s interest and expertise in product and technical knowledge saw him move from sales to marketing as a product planning specialist. \u00a0\u00a0His potential was nurtured by the business, and he was drafted into its \u2018high performing individuals\u2019 program (today the Abdul Latif Jameel Management Trainee Program<\/a>), receiving tailored training and coaching to enable him to achieve his career potential with the company.\u00a0 Several promotions later, and by 2005 he was general manager of the planning group under Marketing Division at that time.<\/p>\n

He was still based in Saudi Arabia, but when Abdul Latif Jameel was looking to launch the Daihatsu brand in Egypt, Tarek was picked he moved back to Cairo as country manager for Egypt.<\/p>\n

\n

\u201cI came to Cairo and helped to build the team. \u00a0We managed all the preparations for the launch, set up the sales network, aftersales, everything. \u00a0We launched in June 2006, and it was a great success,\u201d<\/em> recalls Tarek.<\/p>\n<\/blockquote>\n

\"Ford
R-L: Ford Trucks\u2019 Otman Tebbane, Marketing Specialist; Tufan Altug Africa Region Manager; and Abdul Latif Jameel\u2019s Dina Kamal PR & Comms. Manager, Mohamed Moussa, Industrial Project advisor; Fatih Ceken Regional Representative\/Export, Ford Trucks; \u00a0Tarek Abdullatif \u2013 Regional Director, Abdul Latif Jameel; & Korhan D\u00fcndar MarComms Ford Trucks at the 2017 Egypt launch.<\/figcaption><\/figure>\n

The next 10 years saw the company significantly expand its operations in Egypt and North Africa, with a number of successful launches, including Ford, Hino Trucks and Ford Trucks<\/a>. \u00a0In 2020, he led the launch of Auto Store, a multi-brand automotive retail network.<\/p>\n

As Country \u00a0Director Egypt, his responsibilities cover three main automotive business units: Auto Jameel; the official distributorship for Ford in Egypt<\/a> which includes distribution, network development, retailing, aftersales, etc; ALJICO Misr, the Distributor of heavy trucks, which includes Hino heavy trucks and Ford heavy trucks<\/a>. \u00a0<\/p>\n

Abdul Latif Jameel are also official dealers for MG, Peugeot, Renault and Mitsubishi in Egypt, and have a fast-growing presence in the previously-owned-vehicle (POV) market under the brand \u201cAuto Store\u201d.<\/p>\n

Untapped potential<\/h2>\n

The Egyptian automotive market is often cited as one of enormous, yet untapped, potential. \u00a0For a country of its size, comparable in population terms to Turkey or Iran pushing 108 million people in 2022, sales should be around 600,000 to 800,000 units per year, maybe up to one million during good years. \u00a0In reality, Egyptian automotive sales never reach 300,000. \u00a0The reason? Regular cycles of economic (and political) instability and the relatively high price of vehicles vs. household disposable income. \u00a0<\/p>\n

\"Auto
Auto Jameel Ford HQ location, Cairo, Egypt<\/figcaption><\/figure>\n

Out of a population of over 107 million, only around 5% are able to afford a car, says Tarek. \u00a0It is analogous to the situation 15 or 20 years ago in China. \u00a0But whereas a decade and more of steady growth has propelled the Chinese automotive market to become the biggest in the world, Egypt remains stuck in a cycle of instability and low wages. \u00a0Nevertheless, Tarek remains optimistic that eventually, the potential of the country\u2019s automotive market will be realized.<\/p>\n

\n

\u201cDemand doesn\u2019t disappear.\u00a0 The real demand growth is always there, because we have a large population that is growing 2.5% a year. \u00a0But meeting this demand depends on the economic situation and the ups and downs of the market. \u00a0If we can resolve that, I believe demand will explode and opportunities will come,\u201d<\/em> says Tarek.<\/p>\n<\/blockquote>\n

Government strategy, of course, is essential not only to resolving Egypt\u2019s socio-economic volatility, but also to shaping the development of the country\u2019s automotive market.<\/p>\n

Two of the biggest policy focuses are on local assembly (so called semi- or completely- \u2018knocked-down (SKD and CKD)) and electric vehicles (EVs). \u00a0In early 2022, the government unveiled the latest version of its new automotive strategy. \u00a0The strategy aims to increase local vehicle manufacturing and assembly and increase the sector\u2019s competitiveness to become a regional manufacturing hub and boost exports[1]<\/sup><\/a>.\u00a0<\/p>\n

It also outlined proposals to introduce incentives for locally assembled EVs, and to oblige real estate developers to install charging points in new residential and commercial projects.<\/p>\n

Going electric<\/h2>\n

Over the last five years, EVs have reshaped automotive markets across the globe. \u00a0Egypt is keen to embrace the EV revolution, but the country\u2019s EV market is still at a very nascent stage. \u00a0<\/p>\n

\"\"No EV distributors currently have an official presence in Egypt and the few EVs on the roads tend to be second-hand parallel imports from China or Europe. \u00a0The government is keen to change this, particularly given the country\u2019s hosting of the UN\u2019s climate change conference COP 27 in Sharm El Sheikh in November 2022.\u00a0<\/p>\n

It has launched a tender for the management and operation of 3,000 electric car charging stations within 18 months, starting with the governorates of Cairo, Giza, Alexandria, and Sharm El-Sheikh, at an estimated cost of EGP 450 million[2]<\/sup><\/a>.\u00a0 It has also announced plans to produce the first Egyptian electric car in 2023, and is busy updating existing automotive regulations, which were often based on engine capacity, to accommodate electric vehicles.<\/p>\n

\n

\u201cThe government is very public in its support for electric vehicles.\u00a0 People know this is the future and that they are coming to Egypt soon, but it will take time.\u00a0 Not only to build the infrastructure and increase supply, but also to generate demand.\u00a0 At the moment, buying an EV in Egypt is a high-risk proposition.\u00a0 People need to be confident that will no longer be the case and be incentivized to choose electric.\u00a0 Once that happens, I think take-off will be quick, like we saw in China,\u201d<\/em> believes Tarek.<\/p>\n<\/blockquote>\n

China is one of the most exciting global automotive markets, he believes.\u00a0 The technology, the quality, the marketing has rapidly caught up with the standards and expectations of the West.\u00a0 Where Chinese brands are still weaker, however, is their exporting experience.\u00a0 Until recently, Chinese brands were largely focused on the domestic market.\u00a0 As their focus becomes more global, there are opportunities to support them in terms of supply chain, logistics, aftersales, customer preferences.\u00a0<\/p>\n

\u201cAbdul Latif Jameel can be a great bridge to the Middle East and North Africa.\u00a0 We know the region very well.\u00a0 We have the systems and infrastructure in place.\u00a0 Brands don\u2019t have to build it themselves from scratch, we can partner with them to make it as straightforward and smooth as possible,\u201d<\/em> says Tarek.<\/p>\n

Digital future<\/h2>\n

As for Abdul Latif Jameel Motors\u2019 own growth plans for Egypt, there are two strategies Tarek believes have the potential to drive the business\u2019s development over the next few years.\u00a0 One is investing in digital; the other is building new partnerships.<\/p>\n

\"\"
L-R: [NAME] [POSTION]; Hasan S Al Alami, Senior MD, Abdul Latif Jameel Motors International and Tarek Abdullatif, Regional Director Egypt, Abdul Latif Jameel, at the opening of the multi-brand new and pre-owned vehicles, Auto Store, Green Plaza, Alexandria 2021.<\/figcaption><\/figure>\n

Multi-brand showrooms are very popular in Egypt.\u00a0 But building, developing and marketing these showrooms is complex, expensive, and time consuming.\u00a0 Research shows that most people looking to buy a new car start their journey online, looking what models are available, comparing specifications and reviewing prices, for example.\u00a0 Tarek says Abdul Latif Jameel\u2019s strategy is to invest in its digital presence so it can grab customers at this digital stage of their journey, and then at the appropriate point, direct them to its offline showrooms.<\/p>\n

\u201cOur aim is to develop our digital platform, with a strong emphasis on customer convenience.\u00a0 We are automotive people.\u00a0 We know our customers; we understand the details and key milestones of the customer journey.\u00a0 We have used this insight to develop our online proposition,\u201d<\/em> he explains.\u00a0<\/p>\n

\n

\u201cCustomers have options at every stage \u2013 the brand, the model, the loan, the insurance, the accessories, the warranty.\u00a0 This is all done online, and then we bring them into the showroom to complete the final few stages of the purchase process.\u201d<\/em><\/p>\n<\/blockquote>\n

Version one of the digital platform, is due to be launched in January 2023, with more functionality phased in during the year.<\/p>\n

\"\"
Abdul Latif Jameel Egypt\u2019s \u2018Auto Store Boutique\u2019 Renault retail dealership in Damietta opened mid-2022.<\/figcaption><\/figure>\n

Partners in growth<\/h2>\n

In terms of new partnerships, most, if not all, of the biggest automotive brands already have well established distribution networks in Egypt.\u00a0 This leaves little room for inorganic growth, explains Tarek, so instead, the Abdul Latif Jameel Motors strategy is to take a new brand that is aligned with the business\u2019s values, objectives and approach, and introduce the brand into the Egyptian market.<\/p>\n

\n

\u201cWe will start with a clean sheet of paper and put all our experience behind it, our industry expertise, our resources and build it into a successful brand in Egypt.\u00a0 Our plans were interrupted because of the market situation, but we hope to be able to put this strategy into action very soon,<\/em>\u201d says Tarek.<\/p>\n<\/blockquote>\n

Exactly how soon depends on the evolving regulatory and policy context of the Egyptian market, but despite the hold-ups, Tarek is confident in the market\u2019s long-term potential \u2013 and of Abdul Latif Jameel Motors\u2019 place within it.<\/p>\n

\n

\u201cAs Abraham Lincoln famously said, \u2018this too shall pass\u2019.\u00a0 And when it does, and the market settles down, we are ready.\u00a0 We have a resilient team.\u00a0 We have a clear growth strategy.\u00a0 We are here for the long term.\u00a0 We will implement a successful launch of the new brand and we will show what Abdul Latif Jameel Motors is all about,\u201d<\/em> says Tarek.<\/p>\n<\/blockquote>\n

[1]<\/a> https:\/\/enterprise.press\/stories\/2022\/03\/13\/a-first-look-at-the-long-awaited-automotive-strategy-bidding-for-new-ev-charging-company-management-this-week-66761\/<\/p>\n

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