Mercedes-Benz Egypt, German luxury cars, said its assembler in Egypt, the Egyptian German Automotive Company (EGA), has changed its activity model to become an independent supplier to assemble cars and car parts for other sides.

EGA will continue to manufacture and export disc brakes to Daimler AG, the maker of Mercedes cars, the company said in a statement commenting on news reports about Mercedes-Benz’s exit from the local market by May.

Daimler AG has sold its 26-percent stake in EGA to the National Automotive Company (NATCO), an authorized dealer for Mercedes-Benz passenger cars, the statement said.

It will continue to cooperate in sale and after-sale services without affecting the distribution system or sales, it said.

The statement said the Egyptian customs authorities started in January this year applying a partnership signed with the European Union in 2001, under which 10% of customs duties on European cars were reduced.

The customs reduction will gradually continue to reach 0% in 2020, something that Daimler AG and EGA found would be uneconomical to assemble cars in the local market on the long run, the statement said.

Founded in 1996, EGA was a joint venture to assemble vehicles of the Mercedes-Benz brand in Egypt between Daimler AG and Egyptian businessmen.

The assembled vehicles included the S, C and E ranges and the GLK SUV.