Daimler has moved on its plans – first announced in January – to resume Mercedes-Benz car assembly in Egypt.

It has now signed a memorandum of understanding with the Egyptian government for a project which will see a local partner build passenger cars.

The MoU emphasises local parts supply and technical assistance.

The Memorandum of Understanding not only describes a local Mercedes-Benz passenger car assembly, but also contains other potential fields of cooperation. The assembly will be set up by a local business partner. At the same time, Mercedes-Benz Cars emphasizes the involvement and know-how of Egyptian suppliers.

The company had said in 2015 it would close its local assembly operation due to gradually reducing tariffs on fully imported cars from Europe which made the more costly locally assembled vehicles too expensive to be competitive.

Now production and supply chain chief Joerg Burzer said: "In building up a local car assembly, we will be able to structure our production network even more flexibly and efficiently and respond even better to the needs of our customers."

The company claims to support 1,000 direct and indirect jobs in Egypt with its own import and sales organisation, a central spare parts warehouse and "numerous" authorised retailers and workshops in Cairo, Gizeh, Alexandria and Hurghada.

It may expand the dealer network and build a logistics hub in the Suez Canal Special Economic Zone plus a training centre.

Daimler has also offered Egypt expertise in mobility concepts, e-mobility and electric vehicles, as well as autonomous driving.