Nissan Egypt, the subsidiary of the Japanese car manufacturer, wants to drive more investment into local manufacturing.
It has announced that it will invest $45 million to produce its third locally assembled car. The plan, made possible through an agreement with the government, targets an annual production of 17,000 units—10,000 for the local market and 7,000 for export.
Nissan Egypt’s mission to expand its operations in Africa also aligns with the recent trend of giant Asian car-makers growing their interest in the continent. In October, Japanese automobile upstart and a Nissan competitor, Stellantis announced that it will build production facilities in Egypt in deals worth €116 million ($123 million). Chinese auto-maker BYD also announced plans to expand in Egypt and increase local production of its cars.
What is driving this interest from giant car-makers is Egypt’s Automotive Industry Development Program (AIDP), which incentivises automakers to boost local production. The program offers tax breaks, subsidies, and other benefits that make it cost-effective for companies to manufacture in Egypt while serving both local and regional markets.
Egypt has a shrinking market for car sales, yet consumers are showing a strong preference for fuel-efficient cars, which is where the opportunity lies for these auto-manufacturers. Nissan’s Sunny model car has been one of its hits in Egypt; in 2023, it sold 10,590 units, the most in the country, dethroning the Chevrolet T-Series in unit sales which has held the number spot for the past eight years.
Nissan will build more Sunny model cars. It will also build a new car model to put into the market, with more than half of the parts sourced from local suppliers in Egypt.
Beyond this model, Nissan plans to invest an additional $2 million to raise production capacity for all its locally assembled cars, increasing its total output from 25,000 units to over 30,000 by 2025. This expansion comes as Nissan Egypt looks to grow its export revenue, which already hit $150 million, by 50% in 2024.
