Visitors look at a Chinese-branded vehicle displayed at the China-Arab States Expo on Sept 7 in Yinchuan, capital of Ningxia Hui autonomous region. (Photo:China Daily/Hao Yan)
Chinese automakers to help partners dominate regional market, lower costs
The China-Arab States Auto Cooperation Conference witnessed the signing of two Sino-Egyptian agreements that aim to shift the two countries' automotive cooperation toward localization, as part of the growing network of international ties along the Belt and Road.
The China Council for the Promotion of International Trade, Automotive Industry Committee and Egypt's Holding Company for Maritime and Land Transport inked the deals relating to deepening Sino-Egyptian links in the automotive industry.
"Chinese auto exports are recovering after years of decline, with Egypt being one of the biggest export destinations among the Arab states since 2015," said Wang Xia, chairman of the Automotive Industry Committee of the China Council for the Promotion of International Trade, in his speech on Thursday at the conference held in the Ningxia Hui autonomous region.
Mohamed Youssef, chairman of the Holding Company for Maritime and Land Transport, said: "We are going to seal the deal on the production of a total of 900 vehicles a month, with an expectation to leverage Chinese automakers' experience in assembling and machinery."
Youssef announced that the organization's next critical target is to secure agreements on tractors and bulldozers with Chinese partners in 2018.
Egypt has a huge domestic market that could consume a large amount of China-made vehicles, because the products suit local demand, offering lower prices and economic fuel consumption, according to Egyptian Trade and Industry Minister Tarek Kabil.
He said Egypt's multi-million-dollar automotive market is growing.
According to Kabil, Egypt's development strategy is to focus on local car manufacturing in a bid to conquer its neighboring markets－for example Turkey－thanks to its lower production costs, said Kabil.
The current Sino-Egyptian cooperation agreement is in line with this strategy, as Chinese automakers have shifted their business model away from shipping low-price finished vehicles, toward joint initiatives such as manufacturing locally and co-investing in distribution channels, according to Wang. SAIC-GM-Wuling Automobile, BAIC Group, Changan Automobile, Sinotruk Group, King Long United Automotive Industry, JAC Motors, and Chongqing Sokon Industry Group were among the top Chinese auto exporters to Arab markets in the first seven months of this year, according to data from CCPIT-Auto. The auto committee said that, as of 2016, Sudan and Tunis have emerged as the third and fourth most significant long-term auto export destinations among the Arab states, following Egypt and Saudi Arabia, with Djibouti coming in at fifth.