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Mercedes-Benz to build car factory amid Egypt smart cities push

German carmaker in talks with Egyptian government to move smart city development up a gear

The Mercedes-Benz CLA Coupé is part of a new line of so-called smart cars that the German company makes.
Daimler AG
The Mercedes-Benz CLA Coupé is part of a new line of so-called smart cars that the German company makes.

German carmaker Mercedes-Benz is planning to open an assembly plant in Egypt following talks with the government on supporting smart city infrastructure projects.  

A local Egyptian builder will be awarded the contract for the factory, Mercedes-Benz, a unit of Daimler, said.

Daimler also confirmed that it was in discussions with the Egyptian government about supporting state-backed infrastructure projects linked to smart cities, such as the new capital near Cairo.

READ: Egypt inks $1.2bn deal with China for electric rail link to new capital

Detailed terms need to be finalised, but Daimler said it wanted to offer Egypt its “expertise” in autonomous and electric cars, as well as other advanced mobility technologies.

The high-level discussions come as the automotive giant plans to expand its presence in the Middle East and North Africa.

“Egypt is an attractive and competitive location for production and supporting logistics, and with the planned local assembly, we are confident to be able to expand our market position,” said Markus Schäfer, a member of the divisional board of Mercedes-Benz cars, production and supply chain.  

READ: Talks over project in Egypt's new capital city with Dubai's Emaar halted

Schäfer has held talks with the Egyptian president, Abdel Fattah El-Sisi, in Cairo and separate discussions with the Prime Minister of Egypt, Mostafa Kemal Madbouly. These discussions revolved around how the carmaker could supply technology to support Egyptian transport infrastructure.

Commenting on the car factory in Egypt, El-Sisi said the government was pleased that Mercedes-Benz would restart manufacturing activity and credited the decision to major reforms rolled out in Egypt.

“[This] reflects the improvement of the investment environment and the performance of business in Egypt, in light of the implementation of the comprehensive economic reform programme, as well as the openness of Egypt to cooperate with the German company [...] to develop the automotive industry in its various categories,” El-Sisi said.

It is unclear when or where the passenger car assembly factory in Egypt will be built. 

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Construction Week - Issue 761
Mar 21, 2020