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2012 ANNUAL REPORT
26
GB Auto is the exclusive local agent
and distributor of Bajaj Auto’s motor-
cycles and three-wheel vehicles. Bajaj,
an Indian brand, is the largest global
manufacturer of three-wheelers
and the largest supplier of India’s
robust motorcycles market.
Bajaj vehicles are imported as
SKD (Semi-Knocked Down)
units and are assembled and
finished locally by GB Auto at
the company’s Sixth of October
City Industrial Zone factory.
GB Auto introduced the affordable
three-wheel vehicles, often called auto-
rickshaws or tuk-tuks, to the Egyptian
market in 1999, and today its first-mover
advantage, together with the company’s
extensive After-Sales support network for
the division, helps the company maintain
the lion’s share of the country’s tuk-tuk
sales, despite the appearance of lower-
cost Chinese competitors.
In rural and low income areas, three-
wheel vehicles are used for personal and
commercial purposes as an alternative to
common urban and peri-urban transport
methods. Three-wheelers’ relatively low
up-front cost, minimal fuel consump-
tion and ease of movement often provide
these areas a preferred transportation
option.
GB Auto provides its motorcycle and
three-wheeler customers the same
comprehensive service that it offers its
car buyers, and the Group’s 3S business
model — showrooms, service and spare
parts — extends to its motorcycles and
tuk-tuks business as well.
Indeed, After-Sales is a small but impor-
tant component of this line of business
and a key differentiator for GB Auto in
the market, given that the consumers at-
tracted to two- and three-wheelers place
strong emphasis on the availability of
spare parts and service centers.
To capitalize on this ‘built-in’ demand,
the authorized service center network is
continuously expanded to reach out to
the customers, thus encouraging custom-
ers to return to GB Auto network for
maintenance, spare parts and repairs.
GB Auto’s commitment to total care
for customers of this key segment is
evident in its nationwide network of 16
owned-retail showrooms including 1
dedicated after-sales service center, 21
GB Auto-owned spare parts outlets and
a network of 120 authorized dealers,
as well as 50 authorized service centers
across Egypt.
2012 Business Review
Three-Wheelers (Tuk-tuks)
• During the second quarter of 2012
management cut prices on three-
wheelers to stimulate market demand,
a policy left in-place throughout the
second half of the year.
• The result of this shift in pricing
strategy was that unit sales rose 30.7%
year-on-year in 3Q12 and 69.9% y-o-y
in 4Q12, compensating for weakness
in sales earlier in the year following
the abortive introduction of new taxes
and customs on three-wheelers at the
beginning of the year.
• Pent-up demand for three-wheelers
in low-income / peri-urban areas
remains significant, and management
anticipates that sales in this key
segment will prove to be largely
resilient to any economic shocks in the
coming period.
Motorcycles
• The Boxer 150, introduced in late
2011, proved to be wildly popular with
consumers, driving a 178.0% growth in
unit sales in 2012.
• The change in product mix to include
increased motorcycle sales, which
are sold at lower margins, has seen
downward pressure on the division’s
margins overall.
• Management has continued high
expectations for the development
of Boxer sales heading into 2013,
anticipating that sales will continue
to grow regardless of the economic
fallout of continued political unrest
in the country.
Motorcycles & Three-Wheelers