A number of automobile franchise big names have concurred that car prices will likely rise steeply as a result of the decision by the Central Bank of Egypt (CBE) to devalue the Egyptian pound by 112 piasters against the US dollar.
Among those predicting price hikes is Rauf Ghabbour, the CEO of GB Ghabbour Auto. Speaking to independent daily al-Shorouk, Gabbour said, “All new models will see price increases.”
However, while he predicted price increases, he said the CBE's devaluation move was “a step on the right path for foreign reserves.”
Ghabbour, a leading agent for Korean, Chinese and Japanese brands, said the price raise is “inevitable”, adding that the company used to secure its foreign currency needs from the black-market, which is still providing dollars for a higher rate than the central bank’s official rate.
GB Auto declared an 18.7 decline in net profits for 2015 due to the dollar crisis.
An official at another franchise for a German carmaker, who asked not to be named, also said his company had suspended all car handover contracts until its board agrees on the the amount of the price raise. He told Al-Shorouk he predicts the increases to stand at 15 percent for models worth more than LE400,000.
Sayyed Farrag, a sales manager at Ezz al-Arab Automotive Group, and an agent for French brand Citroen, said the company will raise prices by between 3 and 5 percent, citing “difficulties in procuring dollars officially and continuous hikes in its black-market price.”
Farrag said no new models are available at his company at present due to what he called "customs complications” that hinder the release of the imported vehicles.
Nissan agents have also told distributors of imminent price increases, according to an official at El Masria Auto, who also asked to remain anonymous. The source said that increases will range from LE2,000 to LE30,000 depending on the model and the franchise branch.
As for the effect the imminent increases will have on the used-car market, Effat Abdel Hadi, director of the automobile division at the Cairo Chamber of Commerce, said there will inevitibly be some impact. While the dollar crisis does not have a direct effect on used cars, traders will “seize the opportunity” to raise prices too, said Abdel Hadi.
