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2016 Business Review
Egypt
Despite the foreign currency shortage, the Egyptian pound’s
liberalization impacting the company’s FX costs, and an
overall challenging macroeconomic landscape, GB Auto con-
tinued to reap the benefits of its calculated cost-cutting and
price-increase strategy on its Hyundai, Geely, Mazda, and
Chery brands.
According to the Egyptian Automotive Marketing Informa-
tion Council (AMIC)’s full-year report on the Egyptian pas-
senger car market, the total automotive market fell 27.4% y-
o-y in FY16. More specifically, vehicles within the 1.0-1.3 liter
range witnessed a 54% y-o-y decline in volumes, while those
within the 1.3-1.5 liter range fell 27%. Meanwhile, vehicles
within the 1.5-1.6 liter range saw sales volumes decrease 28%,
while SUVs with an engine capacity larger than 2.0 liters saw
volumes drop 3% y-o-y.
FY16 saw GB Auto’s Egypt Passenger Cars division grow its
sales revenues by 40.3% y-o-y to LE 8,016.1 million despite a
1.2% y-o-y drop in sales volume during the year.
While demand for passenger cars weakened during the year
as a result of the continuing rise in vehicle prices, GB Autowas
still able to grow itsmarket share by capturing existing under-
served demand, after many players in the market decidedly
reduced their stock levels in response to rising FXcosts.
The company’s share of the Egyptian passenger car market,
which includes Hyundai, Geely, Mazda, and Chery, rose to
36.8% YTD in December 2016 compared to 26.8% last year.
The availability of inventory and competitive pricing strate-
gies were key to GB Auto’s success during the year.
Hyundai CBU sales volumes remained almost flat with a
slight decrease of 0.5% y-o-y during the year, while CKD
sales volumes witnessed a 23.5% y-o-y fall. Overall rev-
enues from the brand increased 31.1% y-o-y as the company
introduced gradual price increases to help preserve profit-
ability and margins.
Mazda also did well during the year, with revenues rising
7.7% y-o-y despite a 12.3% y-o-y drop in volumes. Meanwhile,
Geely’s revenues fell 25.8% over FY16 as sales volumes for
both its CBU and CKD units decreased during the year.
Since its launch in March 2016, GB Auto’s latest PC product,
the Chinese Chery vehicle, has delivered promising results
in terms of both profitability and market share. In FY16,
Chery’s market share stood at 5.8% with over 8,000 units
sold in its first year with GB Auto. With the addition of
Chery’s two new CKD models, alongside the Hyundai Elan-
tra, Karry, and Geely, GB Auto now offers five CKD models
compared to only two last year.
Egyptian PC Market Annual Sales
(LE million)
133,591 179,178 198,800
133,165 144,204 133,760 207,973 195,559 141,983
192,848
158,926
94,332
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
2016 ANNUAL REPORT
26
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