The number of passenger cars in use in Qatar is expected to reach about 912,000 units by 2020, registering the highest annualised growth of 5.4% in the Gulf Co-operation Council (GCC) region, according to Alpen Capital.
The UAE is expected to see a compound annual growth rate (CAGR) of 5.3%, Saudi Arabia (5.2%), Bahrain (4.6%), Kuwait (4.5%) and Oman (3.6%) during 2015-20, it said in a report.
Finding that high urbanisation rate and increasing number of affluent consumers have been propelling demand for different types of passenger cars, it said Qatar is likely to see a net addition of around 213,000 cars during the review period.
The number of passenger cars in use in Qatar is projected to account for about 7% of the GCC car fleet in 2020, it said.
Quoting an International Monetary Fund forecast that Qatar's population is set to grow at a CAGR of 3.1% between 2015 and 2020, Alpen Capital said an increasing population base is expected to further support demand for automobiles in the country.
New car sales are projected at nearly 76,000 units in 2020, indicating a CAGR of 1.8% from 2015, it said, adding like other countries, demand for new cars is "anticipated to decline in 2016 and remain under pressure in 2017."
The UAE is expected to record the highest new car sales growth of 4.5% in the GCC during 2015-20, followed by Bahrain and Oman (2.1% each), Saudi Arabia (2%) and Kuwait (1.8%).
The report highlighted that the new passenger car sales in Qatar during first four months of 2016 was dominated by Toyota with a 36.5% market share.
With the launch of a new version, Toyota Land Cruiser strengthened its leading position with a market share of 15.2% during the period. At the same time, Lexus LX jumped to third place, its best ever ranking in the world, on a robust increase in sales. Overall, the Lexus brand gained a 5.3% market share in the country, moving up four positions to the fourth place during January-April 2016.
Growth in the later years is likely to be supported by an expected increase in population and tourist arrivals in the build-up to the mega football event in 2022. The government is investing $200bn on infrastructure projects to prepare itself for hosting the mega event.
Additionally, the government is developing National Museum of Qatar, beaches, shopping malls, and entertainment facilities to attract estimated 7mn tourists by 2030, it said, adding “such factors act as demand catalyst for vehicle sales in the country."
Although the motorisation rate in Qatar, Bahrain and Kuwait is either high or comparable to that in the Europe and Americas, the GCC average is diluted due to low rates in the other member nations, Alpen Capital found.
During 2010-2015, Bahrain, Qatar, and the UAE recorded the fastest increase in new vehicle sales in the range of 8.8% to 10.7%, it said.
Qatar registered over 86,000 new vehicles in 2015, signifying a 9.3% CAGR increase from 2010. The growth is attributed to the domestic opulence and growing population. The country‘s population has grown by more than 8% during the five-year period, as migrants are attracted to the job opportunities emerging out of the country‘s substantial developments to diversify revenue. Passenger cars represented 80.1% of the total new vehicles sold in the country in 2015.
Elsewhere in the GCC region, the report said steady fundamentals would drive the growth of automobile sectors despite short term pressure.
The number of passenger cars in use in the GCC is expected to grow at a 5% (CAGR) from an estimated 10.3mn in 2015 to 13.2mn in 2020.