Egypt

Egypt is known mostly to foreign investors for its tourism, petroleum exports, and the Suez Canal. A fact that often goes overlooked, however, is that the country also happens to be the Arab world's largest producer of automobiles.

Despite this, the local Japanese automotive presence continues to be dominated by imported cars. Mostafa Shaheen, chairman of Toyota Egypt, explains why Toyota is dedicated to supplying the country with vehicles and parts, but not yet expanding into manufacturing.

"Four years ago we started a feasibility study to start an assembly line in Egypt," he relates. "The main reason was of course to have local production, and cut down on import costs. The results, however, were not promising. Today Egypt has 24 manufacturers and 15 assemblers making 70,000 units per year, which is far too many."

"The break-even point has been estimated at 40,000 units per year, in other words, over 50 percent of the market share. No manufacturer has this share. We therefore realized the market leader would be the manufacturer or distributor who offered the best after-sales service. This is what we have focused on," he adds.
Toyota Egypt Chairman Mostafa Shaheen

Owned by Saudi Arabia's Alfa Team, the company's strengths lie in the mid-range of the market. "The Egyptian market is very price conscious, and it is rare to find large cars in Egypt," points out Shaheen. "Because of the local tax structure, economical lines are more popular, which is why our 1.3 and 1.6- liter Corollas have done so well here."

"However, competition is getting severe. Many other foreign car distributors have a presence here and are flooding the market with less reliable but cheaper products. We spend a lot of time and energy on dealer networks and after sales service. Our products may not be the most economical, but all our customers can be assured of the best quality," he adds.

"We believe there is a lot of opportunity in this field, and our strong brand name is a tremendous advantage to us," Shaheen continues. "One of our main selling points is that our clients know they are dealing with a high quality, harmonious company, and that corporate citizenship is fundamental to our work ethic. We sponsor the African Championship, and we have a special club for Toyota owners called the Toyota Egypt Club. Members receive discounts on hotels, in shopping malls, and even a 5 percent discount at the service center."

Asked about his vision for the company in the next five years, he replies: "It has always been my dream to find the three S's (sales, service and spare parts) on every street in Egypt. We will strive to achieve this and continue to offer our utmost commitment to the local market."

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