Egypt's vehicle agents and distributors appear agreed that sales in the Egyptian automotive market have been badly affected by a shortage of foreign exchange and letters of credit (L/Cs).

Poor estimates of demand for vehicles by motor dealers may also have exacerbated the situation, which has led to buyers joining long waiting lists before taking delivery of their vehicles.

L/C difficulties

Chairman of El-Masria for Cars, Mohamed Ahmed Rayan, told Daily News Egypt that the car shortage is down to two reasons.

He says the first is difficulties opening L/Cs with commercial banks while the second is agents' incorrect estimations of demand for cars over the year.

Lobbying efforts

Elsaba Automotive Chairman, Alaa Elsaba, says that there are long waiting lists for some vehicles, including models produced by Mercedes, Jeep, Nissan, Volkswagen, Renault and Kia.

He says that the Chamber of Commerce has lobbied the Central Bank of Egypt to improve L/C availability for motor dealers, but so far there has been no response from the bank.

Price pressure

Elsaba also reckons the problems obtaining L/Cs has pushed car prices up by between 2.5 per cent and 4 per cent.

Kia Sales Director at Egyptian International Motors, Amgad Elfiky, also attributes the vehicle shortage to difficulties opening L/Cs and blames Egypt's monetary policy for this.

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