Bloomberg News

GB Auto Sees Sales Increasing as Hyundai Supply Constraints Ease

November 08, 2012

Ghabbour Auto, (AUTO) the Egyptian distributer of Hyundai Motor Co., Volvo AB and Mitsubishi cars, expects sales to rise this quarter and next year after supply constraints eased and amid expansions in Libya and Algeria.

GB Auto, the biggest independent auto assembler in the Middle East, reported a 26 percent decline in third-quarter profit, missing two analysts’ estimates. Labor strikes crimped supply of parts from Hyundai Motor Co. in the quarter. GB Auto began assembling Emgrand7 cars of Geely Automobile Holdings Ltd. in mid-October.

“This quarter reflects a shortage of supply in Egypt and Iraq for Hyundai cars,” Chief Executive Officer Raouf Ghabbour said in a conference call last night. “We’re hopefully going to receive improved allocations in November and December.”

GB Auto, which has a 31 percent market share of passenger cars in Egypt, is assembling 300 Geely Emgrand7 cars a month and expects that to double by January, Ghabbour said. The company is also working with Hyundai to “redefine” the luxury car segment in Egypt, and started a rental and leasing unit marketing to diplomatic missions and multinational companies.

Ghabbour said commercial vehicles sales could see a “slight improvement” this quarter although investments in infrastructure and tourism in Egypt remains tepid. He didn’t provide details on its Libya and Algeria expansion plans.

GB Auto shares have surged 50 percent this year compared with a 54 percent gain for the benchmark EGX30 index.

To contact the reporter on this story: Nadine Marroushi in Cairo at nmarroushi@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net


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