(I) Basic situation
The Arab Republic of Egypt (hereinafter referred to as Egypt) is located in the northeast of Africa, at the transportation hub of the three continents of Europe, Asia and Africa, and is a shortcut for the sea routes between the Atlantic Ocean and the Indian Ocean. Cairo, the capital of Egypt, has a land area of about 1 million square kilometers and a population of about 107.785 million. According to data from the International Monetary Fund, as of October 2023, Egypt’s GDP was US$398.4 billion, with a real GDP growth rate of 4.2% and a per capita GDP of about US$3,770. China is Egypt’s largest trading partner. According to statistics from China Customs, the bilateral trade volume between China and Egypt in 2023 was US$15.817 billion, a year-on-year decrease of 15%. Among them, China exported US$14.935 billion to Egypt, a year-on-year decrease of 14.9%; China imported US$881 million from Egypt, a year-on-year decrease of 15.7%. China and Egypt jointly built the Suez (TEDA) Economic and Trade Cooperation Zone. By the end of 2022, the TEDA Cooperation Zone had attracted 140 companies to settle in, with actual investment exceeding US$1.6 billion, cumulative sales exceeding US$3.7 billion, and taxes and fees exceeding US$200 million. It directly solved the employment of more than 6,000 people and promoted the employment of 50,000 people. It was rated by Egyptian President Sisi as the most successful project in the Suez Canal Economic Corridor and became an important platform for promoting cooperation between the two countries. China mainly exports electromechanical products, high-tech products and woven clothing to Egypt, and mainly imports crude oil, liquefied petroleum gas and agricultural products from Egypt.
Egypt’s main resources are oil, natural gas, phosphate, iron, etc. The proven reserves are: 4.8 billion barrels of oil, 3.2 trillion cubic meters of natural gas, about 7 billion tons of phosphate, and 60 million tons of iron ore. In addition, there are manganese, coal, gold, zinc, chromium, silver, molybdenum, copper and talc. In 2015, the largest natural gas field in the Mediterranean was discovered in the offshore waters of Egypt, with a potential natural gas reserve of 850 billion cubic meters. Egypt’s proven reserves of oil and natural gas rank fifth and fourth among African countries, respectively. The average daily crude oil production is 711,500 barrels and the daily natural gas production is 168 million cubic meters. The domestic consumption of natural gas accounts for 70% of the total natural gas production, and the remaining 30% is exported.
(II) Automobile market situation
Egypt is a left-hand drive country with about 70 cars per thousand people. According to statistics, Egypt’s new car sales in 2023 will be 65,000, a year-on-year decrease of 63.8%, setting a record of 25 consecutive months of decline. The top three brands in new car sales are Nissan, Chevrolet and Chery, with sales of 10,590, 9,844 and 7,819 respectively. In recent years, the long-term challenges faced by Egypt have been intertwined with multiple global shocks, leading to foreign exchange crises, historic inflation and further deterioration of finances, which have posed huge challenges to the Egyptian automobile market. The continuous rise in new car prices has led to a shift in Egypt’s new car purchase demand to the used car market. Egypt’s used car trading activity has increased, and customers have a great demand for mainstream brand used cars with low age and high value retention. In terms of used car imports, countries and regions such as Dubai, South Korea, and Europe export a large number of used cars to Egypt every year. Port Said is the first choice for exporting used cars to Egypt, followed by ports such as Alexandria and Suez.
(III) Policies and regulations on the import of used cars
- Import policy
Egypt only allows the import of left-hand drive vehicles, and the subject of imported used cars must obtain commercial registration (importer) or professional license (individual). In terms of imported vehicles, passenger cars are only allowed to import hybrid used cars, pure electric used cars, and used passenger cars for disabled people equipped with medical equipment produced in the past three years. Commercial vehicles are required to be less than 10 years old, except for large transport vehicles that can be more than 10 years old. From July 1, 2021, used cars exported to Egypt must complete CargoX registration, otherwise, the used cars will be returned and fined. At the same time, in order to encourage the development of new energy vehicles, Egypt exempts imports of pure electric used cars from tariffs.
- Tax policy
Egypt imposes different taxes on different types of used cars. The specific tax details are as follows
(1) Pure electric vehicles
Pure electric used cars are exempt from tariffs, development fees, planning taxes and other taxes. Only 14% value-added tax is levied.
(2) Hybrid vehicles
Hybrid vehicles are subject to different taxes according to the engine displacement.
(3) Special vehicles for the disabled
Special vehicles for the disabled are exempt from value-added tax, tariffs, etc., and only need to pay 3% development fee.
(4) Commercial vehicles
Commercial vehicles are subject to tariffs ranging from 3% to 60% depending on factors such as vehicle type and age. Other taxes such as value-added tax are also levied.
- Documents required for import
•Import license number
•Business ID
•Tax number
•Business tax registration certificate
•Trader registered at the customs
•Invoice and certificate of origin certified by relevant departments such as the Egyptian Ministry of Foreign Affairs and the embassy