SAIC Motor is considering setting up a vehicle assembly operation in Egypt, according to local reports citing an Egyptian government official.

The Chinese state owned automaker is looking to increase its business volumes in Egypt and other North African markets plus Middle East countries where Egypt has privileged market access through free trade agreements (FTA).

Egypt's minister for trade and industry Tarek Kabil met with a SAIC Motor delegation this month to outline the opportunities available to automotive sector investors in the country, including incentives under a newly approved investment law designed to encourage full manufacturing operations.

The executive director of SAIC Motor's international department, Yang Xiaodong, sees Egypt as one of the most promising markets in the Middle East and Africa. He said his company was in talks with local automotive companies to secure a distribution agreement.

According to local industry sources, new vehicle sales fell by over 31% to 181,000 units in 2017 from 264,000 in the previous year and from a peak of 349,000 units in 2014 – due mainly to a weak local currency and high inflation. 

The country's GDP growth accelerated to 5% last year, however, and investment in its automotive sector has increased in the last six months as auto companies look for the market to rebound.