News has been circulating that the government is working on reviving the Nasr Car Company. There was a time when Fiat licensed out its cars and the whole production lines to countries of the eastern block. Nasr was one of them, to some extent. You see we never purchased the whole lines and we relied on assembling complete knock down kits. We assembled the Zastava 128 all the way till 2009. We probably would have gone on but Zastava stopped producing the kits. And that is why the company was being dissolved; there was no plan B.
But now they are looking for a new partner. Another company willing to upgrade the factories and provide a car or two to assemble. Let me say it up front, I don't like this. At all.
The current passenger car industry in Egypt is split into two main parts: manufacturing and assembly. The manufacturing is to support the mandated percentage of local components for assembled cars. So that mainly is non essential and low tech components like interiors and others stuff. The assembly is again predominantly of CKD kits. Some companies do it because they have the scale like, Hyundai, Nissan and Speranza-- a local re-branding of the Chinese Chery. Others do it because of the high tariffs on their large engine luxury cars, the Mercedes S-Class and the BMW 7Series are both assembled in Egypt. But that won't be for long; customs on European cars are going down because of a treaty and will decrease 10% annually. For big cars where customs were 135%, 13.5% is a huge drop annually. Eventually the small operation in Egypt will not be worth it and cease.
Back to Nasr. The latest news was they had talks with Proton and thankfully didn't go through. I really am against reviving the company just to assemble another CKD kit. Personally I don't like the government owning companies that need to be run super competitively. These government owned companies usually have too many workers and aren't run to be profitable, at least not in the long run. And in they end they are supposed to stay open and essentially provide jobs using tax payer money. I don't mind utilities being government owned, better the government be the monopoly and not a private company. But companies that need to stay competitive and profitable just don't belong in the public sector.
My main gripe is that they want to go back to CKD kits. I don't think that model is very sustainable. If you want the manufacturing to stay you need a competitive edge. It also would be nice if you could be closer to the bleeding edge of technology. If we really are going to have to put money into a company to revive it, why not go with something modern? Why not put money into research and production of hybrid or electric drive trains?
In the end you can only keep the jobs if you provide something more than cost effective access to the Egyptian market. You need to posses know-how and technology. Trying to get into internal combustion engine development might be a little too late but hybrid and pure electric are still new enough. And I'd wish the government would not be so short sighted with its investments when its our money. Short term popularity from job creation really does us no good.
But now they are looking for a new partner. Another company willing to upgrade the factories and provide a car or two to assemble. Let me say it up front, I don't like this. At all.
The current passenger car industry in Egypt is split into two main parts: manufacturing and assembly. The manufacturing is to support the mandated percentage of local components for assembled cars. So that mainly is non essential and low tech components like interiors and others stuff. The assembly is again predominantly of CKD kits. Some companies do it because they have the scale like, Hyundai, Nissan and Speranza-- a local re-branding of the Chinese Chery. Others do it because of the high tariffs on their large engine luxury cars, the Mercedes S-Class and the BMW 7Series are both assembled in Egypt. But that won't be for long; customs on European cars are going down because of a treaty and will decrease 10% annually. For big cars where customs were 135%, 13.5% is a huge drop annually. Eventually the small operation in Egypt will not be worth it and cease.
Back to Nasr. The latest news was they had talks with Proton and thankfully didn't go through. I really am against reviving the company just to assemble another CKD kit. Personally I don't like the government owning companies that need to be run super competitively. These government owned companies usually have too many workers and aren't run to be profitable, at least not in the long run. And in they end they are supposed to stay open and essentially provide jobs using tax payer money. I don't mind utilities being government owned, better the government be the monopoly and not a private company. But companies that need to stay competitive and profitable just don't belong in the public sector.
My main gripe is that they want to go back to CKD kits. I don't think that model is very sustainable. If you want the manufacturing to stay you need a competitive edge. It also would be nice if you could be closer to the bleeding edge of technology. If we really are going to have to put money into a company to revive it, why not go with something modern? Why not put money into research and production of hybrid or electric drive trains?
In the end you can only keep the jobs if you provide something more than cost effective access to the Egyptian market. You need to posses know-how and technology. Trying to get into internal combustion engine development might be a little too late but hybrid and pure electric are still new enough. And I'd wish the government would not be so short sighted with its investments when its our money. Short term popularity from job creation really does us no good.
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