Daimler is planning to build a Mercedes-Benz passenger car plant in Egypt in cooperation with a local business partner, resuming local assembly after several years.

"Egypt is an attractive and competitive location for production and supporting logistics. With the planned local assembly we are confident to be able to expand our market position," said Markus Schaefer, Mercedes-Benz Cars' production and supply chain head.

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The plant would be built by a local business partner.

"We welcome the decision of Mercedes-Benz to resume manufacturing and assembly of cars in Egypt, a step that reflects the improvement of the investment environment and the performance of business in Egypt, in the light of the implementation of the comprehensive economic reform program as well as the openness of Egypt to cooperate with the German company within the framework of its policies to develop the automotive industry in its various categories," said Egyptian president Abdel Fattah El-Sisi.

Daimler said there had been talks on important state infrastructure projects with the Egyptian government. With regard to the new capital in Egypt and the planned new 'smart cities', the automaker had offered its expertise in modern mobility concepts, electro-mobility and electric cars as well as autonomous driving. Detailed agreements had not yet been concluded.

Daimler has its own import and sales organisation, a central spare parts warehouse and retailers and workshops in Cairo, Giza, Alexandria and Hurghada, providing around 1,000 direct and indirect jobs in Egypt.

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The company 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.

The wholly owned Mercedes-Benz Egypt has operated since 1999.