Omani new vehicle sales reached just under 220,000 units in 2013, representing an increase of just over 8%. Looking forward, BMI retains a positive view on the outlook for the sales market, forecasting further growth, of 25.7%, between now and 2018. Moreover, we retain our view that the coming years might see an easing in the growth rate of annual new car sales, after the stellar growth seen earlier in this decade in particular. However, this moderation in growth is a positive sign of maturity within the local market.
On the macroeconomic front, BMI's Country Risk team recently reaffirmed its positive outlook on Oman's economy, with GDP growth of 3.5% forecast for 2014 and 2015. BMI also expects fiscal policy to remain supportive of economic activity over the coming quarters, and projects real growth of 6.0% in government consumption in 2014, from an average of 8.5% in 2009-12. Helping demand for new cars will be the Sultan's November 2013 decision to standardise all civil servants' salaries and grades. Higher wages should also continue to bolster strong levels of private consumption - a key indicator of likely demand for new vehicles. BMI expects private consumption to remain strong throughout the medium term, and forecasts real growth of 5.0% this year, up from an average of 2.8% in 2009-12.
Further support to new car sales could come from the Central Bank of Oman's decision in October 2013 to lower the ceiling on interest rates that commercial banks can charge on new personal loans, from 7% to 6%, a factor that could help those Omanis reliant on financing to purchase a new car. Moreover, the inflationary backdrop remains benign ( BMI projects average inflation of 2.1% in 2014), so there should be no change in interest rates.
Adding further medium-term support to new vehicle sales is the fact that Oman's fixed investment outlook also appears promising. The government has numerous projects in the pipeline, covering transport and utilities, as well as...
The Oman Autos Report features the latest data and forecasts covering production, sales, imports and exports.
Business Monitor International (BMI)'s Oman 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 Oman.
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