Vehicle sales in Qatar are set to register the “strongest” growth of 5.1% in the entire Gulf Co-operation Council region in 2019, Fitch Solutions has said in a report.
In the GCC, the combined markets will average vehicle sales growth of 3.9% with Oman registering the lowest growth at 2.6%, Fitch Solutions said.
Fitch Solutions forecast vehicle sales in the Mena (Middle East and North Africa) region to grow 4.6% in 2019, which is an increase from the 1.6%-growth Fitch Solutions estimate for 2018 but still below previous levels.
That said, the region will be the second-fastest growing market behind only Latin America, where it forecasts sales to grow 8.8%. “Within the Mena region, we expect several of the trends from 2018 to continue playing out, as the markets of the Gulf Co-operation Council experiences muted growth, while North African markets provide the bright spots. Iran will see the biggest risk to its market as the uncertainty around its future relationship with the EU (European Union) threatens the presence of several major brands,” Fitch Solutions said.
Fitch Solutions expect commercial vehicle (CV) outperformance to continue into 2019, forecasting growth of 9.9% compared with 3.7% for passenger cars, as businesses will have the better ability to afford new vehicles.
Infrastructure projects related to events such as the Qatar World Cup (2022) and Dubai's Expo 2020, as well as the tourism industry's demand for buses will combine to support the CV outperformance, the report said.
“While it is positive to see these markets returning to growth, volumes will remain below their previous highs. One bright spot in Oman's lower growth is its commercial vehicles segment, which will see sales grow 4.5% compared with 2% growth in the passenger car segment.
“Continuing to inform our view that CV sales should outperform is the country's extensive pipeline of infrastructure projects, particularly in the transport infrastructure and industrial sectors, along with investment associated with a growing tourism industry,” Fitch Solutions said.
Algeria will be the leading vehicle sales market in North Africa and outperform the Mena region in 2019 with growth of 15%, the report said.
“The growth of domestic production has given consumers the option of cheaper vehicles to purchase, as they are exempt from value-added tax (VAT) and registration tax as part of the government's policy to reduce imports. Limited stocks of vehicles resulted in double-digit declines in sales in 2016 and 2017 and this has created pent-up demand which is now being fulfilled,” Fitch Solutions said.
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