Heightened political and macroeconomic risks are the main factors behind our poor outlook for new vehicle sales market in Sudan. We maintain our bearish forecast for Sudanese new car sales at just 6,500 new car sales in 2017 - up slightly from 4,000 cars expected to be sold in 2013. On the contrary, we see significant room for optimism for the autos market in South Sudan, thanks to its huge oil reserves, expanding population, large amount of arable land and proposed integration with other East African nations.
Our core view for Sudan is that economy will continue to struggle over the medium term, as high inflation, a decline in gold exports, and ongoing political risk will all take their toll. Following an estimated contraction of 6.7% in 2012, we believe that real economic growth will return to positive territory in 2013, but will remain very low by regional (and historical) standards, at 1.3%. We expect that growth will pick up in the coming years, however, and believe it will level off at around 4.8% by 2015. South Sudan, on the other hand, likely topped the global rankings in real GDP expansion in 2013, growing by 42.2% according to BMI preliminary estimates. The statistical base effects will continue to play a role in 2014, as oil production (and the overall economy) has yet to reach its pre-shutdown levels. We are projecting real growth of 21.1% in 2014, which will finally fall to the single digits, to 9.2%, in 2015.
Further downside to our bearish view on Sudan comes from the removal of fuel subsidies in September 2013, which has seen the cost of fuel soar in Sudan. Gasoline prices at petrol stations in Khartoum increased to SDG21 (US$4.77 based on the official exchange rate) per gallon on September 23 from SDG12.5, while the cost of diesel rose from SDG8.5 per gallon to SDG14.0. Although the government has defended by the move as a necessary measure to improve the economy, its dampening effect on vehicle sales market cannot be denied.
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The Sudan & South Sudan Autos Report features the latest data and forecasts covering production, sales, imports and exports.
Business Monitor International (BMI)'s Sudan & South Sudan 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 Sudan, South Sudan.
- Benchmark BMI's independent automotives industry forecasts on Sudan, South Sudan to test other views - a key input for successful budgetary and planning in the Sudanese, Sudanese automotives market.
- Target business opportunities and risks in the Sudanese, Sudanese automotives sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Sudan, South Sudan.
- Assess the activities and market position of your competitors, partners and clients via our Competitive Landscape Analysis.
Summary of BMI's key industry forecasts and views, covering production, sales and the introduction of new technology or products.
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