Volkswagen has outlined a multi-stage investment plan worth $240 million to expand its electric vehicle manufacturing presence in Egypt, the Ministry of Industry and Transport announced on Wednesday.
The German automaker intends to localize production by outsourcing assembly to Egyptian German Automotive (EGA) until it establishes its own factory in East Port Said. A project timeline has not yet been disclosed.
The initiative will rely on Egypt’s supply-chain capabilities and is aligned with the Automotive Industry Localization Strategy under the National Automotive Industry Development Program (AIDP), which offers incentives to support local production of electric vehicles across passenger cars, SUVs, vans, and microbuses.
The details were shared during a video conference held by Minister of Industry and Transport Kamel Al-Wazir with EGA’s chairman, Volkswagen Group COO and Volkswagen Passenger Cars CEO Thomas Schäfer, and senior officials from Volkswagen Africa Group.
Volkswagen’s plan includes strengthening domestic capacity by upgrading the skills of local parts suppliers and expanding component production within Egypt. The company will establish a research and development center to integrate its vehicle technologies locally and set up a technical training center to equip Egyptian workers with expertise in EV maintenance and repair.
According to the ministry, the project is expected to support GDP growth by 7% and generate 2,100 direct jobs along with 4,000 indirect jobs. It also aligns with Egypt’s wider economic strategy to attract foreign investment, enhance competitiveness, and boost industrial output under the Extended Fund Facility (EFF) program.
Minister of Finance Ahmed Kouchouk confirmed that EGP 1 billion has been allocated in the FY2024/2025 budget to fund the Automotive Industry Localization Strategy.
Schäfer said Egypt has the core strengths to become a major player in Africa’s automotive future, citing its industrial infrastructure, skilled workforce, strategic location, and East Port Said’s potential as a modern industrial and logistics hub.
He described the cooperation as a step toward a long-term partnership focused on industry localization, export expansion, and integrating Egypt into global automotive value chains.
Volkswagen first signalled its interest in the Egyptian market in 2023 when it joined the AIDP. Egyptian state entities later signed an agreement with the company to conduct a feasibility study for the East Port Said Automotive Zone (EPAZ), which includes the planned $240 million investment.
The Ministry of Industry and Trade has also launched a national database to support domestic manufacturing and reduce dependency on imported components. The platform tracks industrial integration needs and opportunities to strengthen the localization of Egypt’s automotive sector.
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