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Letter from the CEO

As we go into 2017, we have gained a new, healthier outlook on our core market that leaves us optimistic about the resilience of the Egyptian consumer and the prospects of our business.

 

The diversity of our product portfolio has stood us in good stead, with our Commercial Vehicles & Construction Equipment, After-Sales, and Financing Businesses continuing to deliver solid performances after the float of the Egyptian pound and throughout the first three months of 2017. Our expectation is that they will become increasingly important as our Egyptian Passenger Car business returns to profitability.

 

Our Commercial Vehicles & Construction Equipment line of business continued its solid growth trajectory throughout the year, with revenues climbing on a quarterly basis. The segment is anticipated to benefit from the Egyptian government’s emphasis on infrastructure development in the years to come, particularly within the bus segment. The year saw us successfully deliver 150 vehicles to the CTA and 10 Viaggio 1050 buses, which is expected to see us overtake Super Jet to occupy a leadership position in the city and intercity segments. We also successfully penetrated the tourism segment after a delivery made to TEZ and Carols in 2016, which is anticipated to further boost profitability for the segment as the tourism industry revs up for a recovery.

 

 

Likewise, the After-Sales division has become increasingly important during this time as customers sought out our exceptional maintenance services to increase vehicle lifetime. The segment posted solid growth under all three divisions it covers, with service centers running at higher than-average capacity utilization rates to cope with this increasing demand. We plan to continue expanding our branch network and upgrade our service centers to cater to an even larger demographic.

 

Our Financing Business was also a top performer in 2016, showing growth with a healthy loan portfolio and a coverage ratio in excess of 100%. It is expected to continue to perform well into 2017 and beyond. We expect to roll out new, innovative products across our portfolio of financing ventures, catering to the unique demands of our customers.

 

After finalizing technical assistance agreements with Bajaj to provide engineering data and technical know-how and expertise pertaining to the making of the Boxer 150 and AutoRickshaw models, we are currently on track to construct new component manufacturing hangers, and purchasing machines and equipment for new painting and welding shops to support the growth of our Motorcycle and Three-Wheelers line of business. 

 

As a believer in the solid fundamentals of the Egyptian automotive market, GB Auto has valued long-term growth more than short-term gains. While we anticipate the float of the Egyptian pound is a challenge our business and others will be managing into 2018, we stand by the majority of the Egyptian business community in welcoming the government’s extensive basket of reforms, seeing them as the future of the automotive industry.

 

I would like to extend my sincere gratitude for all your support throughout both the challenging times behind us and the road ahead. We are under no false assumptions that the journey forward will be without bumps in the road, but stand rooted in our belief that companies like GB Auto who weather the storm now, will reap substantial rewards as we roll out new products, technologies, and partnerships that will both boost customer satisfaction and maximize value for shareholders.