Nissan to ramp up Egypt carmaking in bid to boost Africa sales

Nissan Motor plans a $45 million expansion of its car-manufacturing facilities in Egypt this year, seeking to boost local output by a third and ramp up exports to the rest of Africa.

A new production line will see the Japanese automaker deliver at least 10 000 extra cars annually, with more than half of the components being made domestically, Africa Managing Director Mohamed AbdelSamad said in an interview.

A stepped-up presence in Egypt, where operating costs are relatively low, comes as Nissan cuts jobs and shutters plants elsewhere to minimise losses estimated at ¥275 billion ($1.7 billion) for the last financial year.

The plans are also a show of confidence in the Middle East’s most populous nation as an industrial and export hub, even as the spillover effects from the Iran war disrupt global shipping and roil regional economies. China’s top car exporter, Chery Automobile Co, agreed in January to buy Nissan’s manufacturing facilities in South Africa.

Nissan Egypt has shipped more than 25,000 vehicles to African markets in the past three years, with neighboring Libya the largest buyer, AbdelSamad said. Its current facility in western Cairo manufactures about 30,000 units annually.

Nissan is “constantly evaluating alternative routes,” AbdelSamad said. “Egypt’s strategic location and our diverse logistical network within Africa provide us with multiple viable options to maintain our export momentum.”

Egypt, which is emerging from a chronic foreign-currency crunch after securing a $57 billion global bailout two years ago, has been charting a manufacturing and export-led revival that would help shrink the trade deficit and protect it from external shocks.

Nissan has invested about $276 million in the country to date and seeks to benefit from the African Continental Free Trade Area’s eventual expansion to the car industry, according to AbdelSamad.

Morocco is the continent’s largest passenger-car manufacturer and exporter, although it mainly focuses on European markets. Egypt’s locally built vehicles, meanwhile, are primarily destined for other African and Arab nations.

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