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Customs on imported cars increase by 66% after flotation

Customs on imported cars increase by 66% after flotation

CAIRO: Customs charges on imported cars increased by 66% on Friday following the flotation of the Egyptian pound. This decision was made on Thursday when customs recorded a 52% increase calculated according to the price of the US dollar against the Egyptian pound in the free market, which will be reviewed on a daily basis.

The decision to increase customs is based on the Customs Authority’s calculation of the dollar exchange rate at EGP 14.65, an EGP 1.65 increase compared to Thursday.

The automotive sector has temporarily halted sales after the Central Bank of Egypt’s decision (CBE) to float the pound. Auto companies are currently carrying out repricing operations based on the mechanisms of supply and demand in the market and the increase of interest rates by 3%. The CBE announced its decision on Thursday, as a long-awaited step to save the economy.

Auto companies expect car prices will increase due to the appreciation of the dollar rate. Prior to the flotation, companies paid custom fees on cars according to the official dollar price set by the CBE at EGP 8.88. After the liberalisation of the national currency, this rate exceeds EGP 14.

Price increases have impacted 150 models of popular brands in the auto market since October until early November, recording high level estimations among car companies on the price of importing cars and their components. This has resulted in a lack of supply in the market.

The increase included the two German brands Opel and Volkswagen, the Korean brands Hyundai and Kia, the American brands Chevrolet and Jeep, and the Japanese brands Mitsubishi and Toyota.

This new increase follows price hikes in the market over the past few months, fuelled by the lack of foreign currency necessary for importing, and the appreciation of the dollar in the unofficial market.