Automotive Division: 100% Increase in Spare Parts Prices amid Halt to Imports
Newspaper Title: https://see.news/
Newspaper Number:
Friday - 30 September 2022
Amir Hilaly, head of the Importers Committee of the Automotive Division of the Cairo Chamber of Commerce said that the market suffers from a great shortage in supply, with the prices of some products exceeding 100%, especially the car tires and spark plug kits.
Hilaly added that for global reasons related to problems in supply chains and the increase in the prices of raw materials globally due to the repercussions of the Russian-Ukrainian war in light of a global and local inflation wave.
He attributed the reasons for the decline in supply mainly in the mechanism of dealing with collection documents, which resulted in delays in obtaining documents for companies to import spare parts, in addition to delaying procedures for releasing shipments held at customs.
The continuation of the crisis leads to the unavailability of the spare sector in the market, and thus paralysis in a vital and strategic sector occurred, in addition to the exploitation of some traders during the crisis, and raising the prices of spare parts to double, and triple prices, which contributes to increasing inflation rates at a time when the state is working to reduce it.
He added that the delay in the provision of auto spare parts results in the obsolescence of parts and the expiration of their validity period, such as tires, as they have an expiration date, or in a more precise sense, the older the date of manufacture, the greater the risk to the consumer on the road.
He pointed out that there are short-term solutions, including allowing the import of spare parts without the collection documents mechanism, or at least excluding basic spare parts from that mechanism until it is completely cancelled.
He calls on an immediate release of the shipments held at customs, in addition to activating the Consumer Protection Agency and the Competition Protection Agency and carrying out continuous inspections of those who are proven to have exploited consumers during the crisis, manipulated prices and monopolized products, and allocated a unified complaint number to report on those cases of spare parts.
In the medium term, he pointed out, the launch of an initiative by the Central Bank of Egypt (EGP) and the Enterprise Development Agency to localize the auto spare parts industry, especially popular car parts that are widespread, including giving loans at low interest rates over a long repayment period, to establish factories specialized in the manufacture of spare parts, which will save the state tens of millions of dollars.
He pointed out that imports decreased in the first 4 months of this year by 12%, as Egypt imported $54 million worth of cars spare parts in January, $53 million in February, $62 million in March and $43 million in April, annually imports of car spare parts ranging from $500-650 million.
Spare parts are approximately 98% imported and 2% are locally manufactured.
