Looking at trends for 2014 and beyond, BMI believes that the Bahraini auto market will continue to see strong and steady growth, with total sales set to near 65,000 per year by the end of our newly extended forecast period in 2018.
The most recent Bahraini new light passenger vehicle sales data (for the first nine months of 2013) show an 11% increase, to 38,213 units. This ties in well with BMI's own view that new vehicle sales should increase by 14.5% over the year as a whole.
Backing up our optimism towards the local sales market is a favourable economic backdrop. BMI's Country Risk team forecasts relatively robust economic growth of 3.4% in 2014, as elevated public spending and support from the rest of the Gulf Cooperation Council (GCC) help to underpin non-hydrocarbon activity. However, output gains from the oil sector will be limited after a strong recovery in production in 2013, leaving government-backed construction activity and a modest recovery in the private sector as the main drivers of growth.
There are also signs of improvement in business activity. Bahrain's US$7.1bn sovereign wealth fund Mumtalakat, which holds significant stakes in national non-oil firms ranging from aluminium to food production (and therefore provides a good indication of the strength of the economy), stated in January 2014 that the performance of its portfolio is improving, following financial losses over 2011 and 2012. The Bahraini stock market has also been on an upsurge since the start of the year (with gains of 4.4% to-date), after having remained flat throughout the second half of 2013. Finally, we expect a number of public infrastructure projects to be initiated over the coming quarters, a factor that should help to widen Bahraini banks' lending opportunities.
Turning to the outlook for private consumption - a key indicator of likely demand for new vehicles - BMI is targeting growth of 5.8% in 2014, down only slightly from the 6% estimated for 2013. Employment continues...
The Bahrain Autos Report features the latest data and forecasts covering production, sales, imports and exports.
Business Monitor International (BMI)'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.
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BMI Industry View
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