Bahrain Autos Report

Published 18 June 2015

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Bahrain Autos Report

This quarter, BMI maintains its view that new vehicle sales growth will slow over 2015. We continue to target a still-healthy 6.5% sales growth for the current year, down from the very strong estimated 14% growth seen over 2014. A deteriorating macroeconomic picture is the main reason behind our expectation for lower new car sales growth in 2015. As one of the MENA countries most exposed to lower oil prices, it is clear that Bahrain's growth outlook has weakened since the end of last year. The retrenchment in global oil prices is putting substantial pressure on the state finances - and by implication the system of public spending underpinning the non-oil economy. Throughout the remainder of 2015 and into 2016, private sector activity will suffer from further erosion in consumer and business confidence, already weakened by the persistent uncertainty of Bahrain's political environment. That said, the impact of the oil price slump will be cushioned by macroeconomic and financial assistance from the rest of the Gulf - in the form of infrastructure funding and the purchase of Bahrain's fixed income instruments. We forecast Bahrain's economic growth slowing to a still-respectable rate of 3.4% in real terms this year and 3.3% in 2016, compared to an annualised 4.0% between 2010 and 2014.

Bahrain's dependence on hydrocarbons is pronounced. The government derives nearly 90% of its revenue from the oil and gas sector and we expect the country's budget deficit to widen to a record 10.5% of GDP this year. Bahrain has limited foreign exchange reserves and its sovereign wealth fund Mumtalakat only has assets of USD10.5bn. As such, we believe that Manama will have little option but to introduce new taxes over the coming years, while the issue of spending consolidation will loom large on the agenda. This could weigh on the prospects for passenger car and SUV sales in particular.

Turning to the near-term outlook for private consumption - a key indicator of the potential demand...

Table of Contents

BMI Industry View
7
SWOT
10
Political
12
Economic
13
Operational Risk
14
Industry Forecast
16
Table: Autos Total Market - Historical Data And Forecasts (Bahrain 2013-2019)
16
Sales
16
Trade
19
Passenger Vehicles
20
Table: Passenger Car Market - Historical Data And Forecasts (Bahrain 2013-2019)
20
Table: Bahrain - Top 10 Manufacturers By Sales, 2014
21
Luxury Cars
22
Commercial Vehicles
24
Table: Commercial Vehicle Market - Historical Data And Forecasts (Bahrain 2013-2019)
24
Macroeconomic Forecast
27
Economic Analysis
27
Table: BMI CRUDE OIL PRICE FORECAST
29
Table: BAHRAIN - REAL GDP GROWTH, % CHG Y-O-Y
31
Table: BAHRAIN - MAIN INFRASTRUCTURE AND INDUSTRIAL DEVELOPMENTS
33
Table: Economic Activity (Bahrain 2010-2019)
34
Industry Risk Reward Ratings
35
Middle East - Risk/Reward Index
35
GCC Still Dominates
35
Little Change Mid-Table
36
Conflicts Take Their Toll
36
Table: MENA Autos Risk/Reward Index
38
Company Profile
39
Company Monitor
39
Al Zayani Investments
41
Ebrahim K Kanoo
44
Regional Overview
46
Middle East Overview
46
Table: MENA Autos Production Investments
46
Global Industry Overview
48
Africa Still The Growth Driver
48
Oil Prices A Boon For Importers
49
Regulation Driving Innovation
51
Table: Fuel Economy Targets By Geography
51
SUVs To Be Segment Of Choice
52
Demographic Forecast
53
Table: Population Headline Indicators (Bahrain 1990-2025)
54
Table: Key Population Ratios (Bahrain 1990-2025)
54
Table: Urban/Rural Population & Life Expectancy (Bahrain 1990-2025)
55
Table: Population By Age Group (Bahrain 1990-2025)
55
Table: Population By Age Group % (Bahrain 1990-2025)
56
Methodology
58
Industry Forecasts
58
Sector-Specific Methodology
59
Sources
59
Risk/Reward Index Methodology
60
Table: Automotive Risk/Reward Index Indicators And Weighting Of Indicators
61

The Bahrain Autos Report features the latest data and forecasts covering production, sales, imports and exports.

BMI Research's Bahrain Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the automotives market in Bahrain.

Key Benefits

  • Benchmark BMI's independent automotives industry forecasts on Bahrain to test other views - a key input for successful budgetary and planning in the Bahraini automotives market.
  • Target business opportunities and risks in the Bahraini automotives sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Bahrain.
  • Assess the activities and market position of your competitors, partners and clients via our Competitive Landscape Analysis.

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts and views, covering production, sales and the introduction of new technology or products.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the autos sector and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series and forecasts to end- 2019 for all key industry indicators (see list below), supported by explicit assumptions plus analysis of key downside risks to the main forecast, including:

Sales and production of motorcycles in units; total production of units; production by vehicle type (including cars, commercial vehicles, trucks and buses); total vehicle fleet size in units; sales by vehicle type, including passenger cars and commercial vehicles; fleet size by vehicle type, including passenger car, commercial vehicles and motorcycles; total vehicle trade balance in units; vehicle trade balance by vehicle type, including passenger car, commercial vehicle and motorcycle; car ownership measured as car density per 1,000 people.

BMI’s Autos Risk Reward Index

BMI’s Risk Reward Index provides investors (manufacturers, suppliers and dealers) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each indices explained.

BMI Economic Forecasts

BMI forecasts to end-2019 for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company  developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Global, Regional and Country Industry Overviews

In-depth analysis of the major global and regional developments in the market, which can be linked with the country industry overview, providing cross-country  investment, product and financing trends that will affect each market, supported by BMI’s global and regional industry forecasts.

Sources

The Autos reports draw on an extensive network of primary sources, such as manufacturing associations, statistical bureaus, government transport ministries, national chambers of commerce and industry, national statistical offices, government ministries and central banks and multinational companies.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc