Aboul Fotouh Automotive: Pioneering Egypt's Luxury Car Revolution Since 1978
Updated 9/17/2024 8:00:00 AM
Arab Finance: The automotive industry in Egypt has experienced significant growth, positioning itself as Africa's second-largest market and the 42nd-largest globally.
With an annual production capacity of around 300,000 vehicles, recent figures show over 70,000 vehicles produced. The Egyptian market can sell more than 200,000 vehicles each year, supported by a population of over 100 million, of which only 35 out of 1,000 own a car, highlighting substantial growth potential, as reported by 6Wresearch.
Despite facing challenges like the impact of the devaluation of the Egyptian pound on import costs, the market remains appealing to both local and international manufacturers.
Aboul Fotouh Automotive (AF Automotive), a key player in this sector for over 45 years, continues to lead in innovation and growth. In this exclusive interview, Vice Chairman and Managing Director Ghada Aboul Fotouh discusses the company’s journey, its dedication to quality and efficiency, and its vision for the future of Egypt's automotive landscape.
1-AF Automotive has been a cornerstone of the Egyptian automotive industry for over 45 years. Can you share the company's vision back in 1978 and how it has evolved alongside the market?
In 1978, Houssam Aboul Fotouh had a vision to change the Egyptian automotive industry. He brought the German giant BMW to Egypt, which slowly shifted the mindset of Egyptians that a car is not only for errands but rather a lifestyle and a statement about who you are. He basically created a competitive luxury car market in Egypt.
The company’s vision has always been to stay up to date with both the local and international markets. We ensure our success and continuity by applying new techniques and strategies to both the assembly line and the managerial departments of the company.
2- AF Automotive boasts an impressive production capacity of 10 vehicles per hour. Can you elaborate on the technology and assembly processes that enable such efficiency?
Our impressive production capacity of 10 vehicles per hour is a testament to our advanced manufacturing practices. The company leverages a continuous flow production line, ensuring a steady and uninterrupted flow of work.
Takt time management, a crucial component of this process, synchronizes production with customer demand. Additionally, parallel processing allows for multiple tasks to be performed simultaneously, further enhancing efficiency. The facility's well-designed layout and efficient logistics minimize waste and maximize productivity.
Furthermore, Aboul Fotouh invests in operator assistance systems and lean manufacturing techniques to optimize workflows and reduce errors. A skilled workforce, coupled with comprehensive training and development programs, plays a vital role in achieving such high levels of output.
The company's integrated supply chain ensures timely delivery of components, while advanced manufacturing technologies like modular manufacturing and flexible manufacturing systems enable customization and adaptability.
Finally, our robust quality control and monitoring system guarantees that every vehicle meets stringent standards.
3- How do you evaluate the competition in the Egyptian automotive market? And what sets AF Automotive apart in this evolving sector?
The Egyptian automotive market is highly competitive and constantly evolving, which makes it exciting and challenging.
We respect our competitors in the automotive market, as they push us to do better. We currently assemble the Tiggo 4, Tiggo 7, and Tiggo 8 Chery models, as well as the Foton and Golden Dragan Microbus.
4-The company website highlights a shift towards electric vehicles (EVs). Can you share Aboul Fotouh's plan to integrate EV assembly into the current production line?
EVs are the future of the automotive industry. While the company recognizes the growing importance of EVs in the future automotive landscape, we currently have not delved into EV assembly yet.
However, we are willing to integrate EVs into our existing production capabilities in the future.
5-With the recent rise in ride-sharing services, how is Aboul Fotouh adapting its customer service approach to cater to both individual and fleet owners?
As Aboul Fotouh understands the shift in today’s automotive market, we have been able to enhance services for both B2C and B2B customers. Our aftersales center has also been changed to adapt to this.
For our B2C customers, we have created a loyalty card that gives our customers faster access to car maintenance, price discounts, and special perks for our mobile service.
On the other hand, our aftersales services for B2B customers include offering special waiting areas for fleet owners, in addition to dealing with specialized mechanics, experienced employees, and discounted services tailored to the large number of cards that they bring to us.
6-Can you elaborate on the strategies in place to ensure customer satisfaction throughout the ownership journey?
Strategies to ensure the highest rates of customer satisfaction go beyond the service center as we follow up with customers days after their visit with a customer satisfaction call.
While this might seem traditional, studies have shown that customers want to be heard. And this is what makes our customers keep coming back.
7-Could you provide insights into the company's performance metrics, specifically regarding client acquisition, sales volume, and mid-year financial results?
AF Automotive closely monitors a range of key performance indicators (KPIs) to assess the company's overall health and guide strategic decision-making. These KPIs span various aspects of the business, including financial measures, internal business processes, customer satisfaction, and employee learning and growth.
From a financial perspective, we track metrics such as revenue growth, profit margins, and return on investment to ensure the company's long-term viability and profitability. Internal business process measures, on the other hand, focus on operational efficiency, production quality, and supply chain optimization.
By continuously monitoring and improving these metrics, AF Automotive can identify areas for streamlining and cost reduction while maintaining high standards of product quality.
8-What measures is Aboul Fotouh Automotive taking to mitigate the effects of inflation and the devaluation of the Egyptian currency on operational costs and vehicle pricing?
To mitigate the inflation effect without harming our employees, the company absorbs 50% of the EGP devaluation, while the remaining 50% is on the selling price.
9- Does Aboul Fotouh Automotive collaborate with local suppliers to enhance the quality and competitiveness of locally manufactured components?
We have a training center and engineering team that enhance competitiveness quality.
Aboul Fotouh has trained its engineers to the highest standards to differentiate between defective and high-quality components to be used in vehicle assembly. This practice has been passed on for years since the first time we began vehicle assembly in the mid-90s.
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