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2012 ANNUAL REPORT
23
state-of-the-art facility features latest-
generation quality control systems, fully
automated conveyer assembly lines, and
the first fully robotic paint shop in the
Middle East and North Africa.
Prima can now accommodate the
simultaneous assembly of different brands
and models including Hyundai and Geely
passenger cars and Mitsubishi Canter com-
mercial vehicle cabins. The Prima manufac-
turing workforce, which includes more than
1,000 employees, works two shifts over 19
hours each day. The facility’s maximum an-
nual capacity now stands at c.60,000-70,000
units following the plant overhaul.
Prior to the completion of the factory
overhaul at the end of September 2012,
the Prima plant had produced more than
210,000 Hyundai passenger cars (Excel,
Accent, Sonata and Verna models) since
its establishment in 1994.
2012 Business Review
Egypt
• GB Auto’s market share of 28.9% in
FY12 is more than 10 percentage
points higher than that of its nearest
competitor on a YTD basis.
• Sharp supply constraints — particularly
on high-demand models including
Hyundai Elantra and Accent —
throughout 3Q12 and into 4Q12
dampened unit sales, which in turn put
pressure on revenue and gross profit for
this segment on a full-year basis.
• The shift in sales mix in favor of CKD
models in the second half reflects
supply constraints on popular CBU
models and the natural result of
consumers being drawn to the more-
approachable pricing on CKD in times
of economic difficulty. This has the
beneficial effect of improving margins
for the Egyptian passenger car division.
• Rising high-margin After-Sales
revenues reflect strong performance
by the completion of our After-Sales
network expansion in 2012; the final
pillar of the expansion (the Cairo
Ring Road facility) will have its official
opening in June 2013.
• Geely sales began in the fourth quarter
following the mid-October launch of
the Emgrand7, with the vehicle warmly
greeted in the market and 306 units
sold; more than 80% of those sales took
place in December.
• Management anticipates steady growth
in Geely sales throughout 2013 as
the company begins full commercial
assembly operations in late 1Q13 to
maximize use of capacity at the newly
renovated Prima facility. Alongside
CBU activities, the CKD sales will
enhance the product offering and
pricing mix on this potentially strong-
selling brand.
• The weakening of the Japanese yen
will see the resumption of Mazda sales
towards 2H13 as this well-regarded
brand becomes more price-competitive
in the local market. As we have noted
since we began working with Mazda
again in 2010, we anticipate that once the
price point is approachable, Mazda sales
will perform quite well in this market.
• Management expects that 2013 will
see the company maintaining its
leading market position, although
the fallout from devaluation of the
Egyptian pound will likely see unit
sales dropping significantly market-
wide, particularly in the CBU segment.
On the other hand, management
anticipates higher margins as the
product-mix shifts to higher-margin
CKD sales.
Iraq
• One-off supply constraints in 3Q12
dampened full-year unit sales, but had
been addressed in 4Q12 and improved
supplies are secured going forward,
with a 30% rise in allocation for 2013.
• Gross profit for this segment was up in
FY12, although management does not
expect that this growth rate will prove
to be sustainable.
• Iraq witnessed record margins in FY12
despite a slight drop in unit sales.
• On the After-Sales front, management
continues a measured expansion of the
service center network and consumer
education programs.
• Sales of vehicles through our Iraqi
operations are made in Iraqi dinars,
which are easily convertible and
closely tied to the US dollar, providing
an important buffer to currency
pressures in our home market of
Egypt.
6,640
11,344
41,238
25,010
20,305
6,072.3
5,741.9
3,675.4
2,893.1
5,383.0
Segmentation of the Egyptian
Passenger Car Market
(Units Sold and % Market Share as of
Year-End 2012)
Revenues by Year
(LE Million)
Hyundai
Chevrolet
Kia
Renault
Toyota
‘08
(28.6%)
(17.4%)
(14.1%)
(7.9%)
(4.6%)
‘10
‘09
‘11 ‘12
30,555
20,963
27,501
14,145
51,924
50,103
43,982
17,749
21,599
22,439
GB Auto Sales Volume Across
All Brands and Markets
(Vehicle Units)
‘08
CKD
CBU
‘10
‘09
‘11 ‘12
Source: Automotive Marketing Information Council (AMIC).
Please note that AMIC figures are based on individual
companies willingly contributing/reporting their sales and that
GB Auto cannot check the full accuracy of these or guarantee
that all companies operating in Egypt report to AMIC.