CAIRO – China's Geely Automobile has signed a deal for GB Auto to assemble Geely cars in Egypt and distribute them in North Africa.
Cairo-based GB Auto is the biggest independent car assembler in the Middle East. The company will sell Geely passenger cars in "select high-growth markets across North Africa," it said in a statement on Tuesday.
GB Auto will start by selling two models in Egypt in the second quarter and assemble vehicles starting in the third quarter.
GB Auto will continue to build Hyundai Verna models, it said. "We selected Geely after an exhaustive global search," GB Auto's CEO Raouf Ghabbour said.
Geely products offer "the best value for money in a critical segment that meets our consumers' needs and expectations," he said.
GB Auto has been assembling variations of the Hyundai Accent, a four-cylinder sedan, in Egypt since 1995. That agreement is due to finish at the end of 2013, Ghabbour said in November.
The deal with Geely will enable GB Auto to "target a different segment of the population" because of the cars' relatively lower price, Samir Murad, vice president of research at Kuwait-based NBK Capital, said.
"The deal is coming at a good time for the company as it allows them to build complete knock-down models in Egypt when Hyundai may not be renewing its assembly contract," Murad said.
GB Auto had about a 32 percent share of the Egyptian passenger car market in 2011, according to its estimates.