Egypt Launches National Program to Boost Automotive Industry with Long-Term Incentives
The National Automotive Industry Development Program (AIDP) has been approved by the Cabinet and the Supreme Council for the Automotive Industry as of May 2025. The program aims to revitalize Egypt’s automotive sector over the next seven years, with a gradual increase in production volumes and local content ratios.
Key targets include increasing local value addition to 60%, raising the industrial component of vehicles above 35%, achieving annual production of 100,000 cars, attracting new investments, and promoting electric and environmentally friendly vehicles. The program also prioritizes establishing factories in strategic regions to support regional development.
Incentives are tied to production volume, local content, new investments, environmental compliance, and regional development. Factories exceeding 35% local content receive an additional EGP 5,000 per 1% increase per vehicle. Incentives for regional development include partial or full land cost refunds for factories exceeding specified production thresholds.
Eligibility conditions include a minimum annual production of 10,000 vehicles for fossil-fuel cars and 1,000 for electric vehicles, with gradual increases in local content over the seven-year program. The maximum vehicle price for incentive eligibility is EGP 1,250,000 with an engine capacity of up to 1,600 cc, and total incentives capped at 30% of the factory price.
Egypt’s automotive sector offers significant investment advantages, including a growing domestic market, low operational costs, and a wide network of free trade agreements that enable duty-free exports to multiple markets.
Experts warn investors against common mistakes, such as starting with minimal production, failing to plan for incremental increases in local content, relying entirely on imported components, or neglecting environmental and sustainability requirements.
The AIDP presents a unique opportunity for investors to participate in Egypt’s industrial transformation, benefiting from comprehensive incentives, strategic focus on green mobility, and Egypt’s position as a gateway to regional markets.