By Mohamed Ahmed
GB Ghabbour Auto is conducting advanced negotiations with the Ministry of Industry on the percentage of local components in tuk-tuks and motorcycles to be manufactured in the factory the company is looking to establish.
According to company sources, who requested anonymity, the discussions with the government include a timeframe to gradually reach the percentage of local components subject to the discussion. There are also parallel talks with a major supplier on the same issue.
The sources asserted that the supplier fully understands the role that local components will play in the production of tuk-tuks and motorcycles. It is expected that work on establishing the factory will commence by the end of this year or at the beginning of 2016.
The company previously revealed that it has a technical partnership with Indian company Bajaj, specialised in manufacturing tuk-tuks and motorcycles.
Automotive manufacturers with the Chamber of Engineering Industries have agreed on the main goals of strategy for the manufacturing vehicles and their components. These goals include increasing the domestic industry by raising the percentage of local components in the automotive industry from 45% to 58% gradually over 15 years.
The goals also include maintaining competition in the automotive industry through decreasing the customs tariff and amending the sales tax.
On the other hand, sources have emphasised that GB Auto welcomes the Cairo Governor’s decision regarding banning tuk-tuks from eight neighbourhoods, including Downtown Cairo and Zamalek.
The sources thought it unlikely for the decision to affect sales of tuk-tuks, due to the currently high demand for this product in the market.
Tuk-tuk and motorbike sales in Egypt amounted to EGP 488.1m in the second quarter of 2015.