What has been happening over the last year has made the already expensive autos become even more expensive (if they can be found that is). This is a breakdown of how things got to this point.
At the height of the Covid pandemic the supply chain problems triggered a global slowdown of goods reaching their intended markets and a shortage of computer chips essential for new vehicles created the ideal solutions for a car supply crisis.
Despite the fact that Egypt assembles some car models, the supply created is nowhere near enough for the huge demand in this market, when imports failed to arrive many dealers opted to raise prices for their existing stock.
This led to the appearance of the so-called Overprice fee that has dominated the news cycle for months resulting in government attempts to control this phenomenon, which failed to do much except make these increases official but not subject to further increases.
To make matters worse the Egyptian Pound got hit by a 15% devaluation and an equal amount in inflation, desperate to hold on to hard currency the government has changed the way letters of credit operate effectively freezing imports unless it’s for material needed for production.
Predictably all the factors mentioned caused increased prices and shortages. Dealers were ordered by the government to pay back people who didn’t get their cars and made down payments before the devaluation with the full amount plus 18%.
A number of car makers that suffered delayed payments from local agents and dealers opted to suspend shipments to Egypt as other markets also have elevated demand but less issues to contend with.
Repeated hits like these have caused an unprecedented price hike in new and old models and the crisis doesn’t seem to show signs of reversal anytime soon.
