30 Jan 2013 (43 Pages)
Includes 3 FREE Quarterly Updates.
Our core view for the Bahraini autos market envisages only modest growth in vehicle sales in our forecast period to 2017. In 2013, we forecast vehicle sales to grow only 3% y-o-y, to 54,500 units - compared with the 5% y-o-y we expect in 2012.
Much of the growth in 2012 is expected to have come on the back of a continued favourable demand fundamentals in the households in the year. We believe household consumption should continue expanding at a relatively steady clip over the coming quarters, supported by low interest rates and the uptick in government spending. However, what prompts our cautious view for the autos market is the fact that activity in Bahrain's non-oil sector is likely to remain relatively weak through 2013.
For the rest of our forecast period to 2017, we expect sales growth to average close to 4.4% y-o-y between 2014 and 2017 - reaching 64,600 by the end of the forecast period. Vehicle ownership levels have shown only modest growth in the recent past, and even more incremental increases in the near future (from 420/1,000 in 2009 to 491/1,000 in 2017), is particularly suggestive of the fact that the market is not going to experience huge growth, and that it may even be at a level of marginal replacement. At this rate, the market is expected to perform poorly compared with the average 7% y-o-y rise in vehicles sales between 2006 and 2011.
A significant proportion of the new vehicles sold in the market will continue to be imported. Growing at an average 5.4% y-o-y between 2013 and 2017, we see imported vehicles taking up over 90% of the total vehicle sales. Japan'sToyota Motor stands as the most dominant player in the market and cornered more than 38% of the total new vehicle sales in the first nine months of 2012. Nissan Motor and Hyundai Motor stand as its closest rivals, but their presence in the market is nowhere close to Toyota's. Between January and September 2012, Nissan and Hyundai held respective market shares of 13.7% and 11.8%, with sales of 4,705 and 4,065 vehicles respectively. In the premium vehicle segment, Lexus, BMW and Mercedes-Benz are among the most popular luxury brands in the market.