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By Gulam Ali Khan
After the significant drop in passenger-car and commercial-vehicle sales in 2016, Oman's automobile market is anticipated to witness a slow recovery between 2017 and 2020.
Business Monitor International (BMI) Research estimates that passenger-car sales in Oman are down ten per cent in 2016, with commercial vehicle sales dropping 15 per cent.
“Both categories will experience only a modest recovery from 2017, with aggregate vehicle sales expanding by average annual growth of just over one per cent per year across the period of 2017 to 2020,” the Fitch Group company said in its recently published Oman Autos Market report.
Total vehicle sales in Oman, according to BMI, fell 7.2 per cent year-on-year to 77,159 units in the first nine months of 2016, with private-car sales falling 3.7 per cent to 54,758 units, sales of rental cars dropping 27 per cent to 2,716 units and sales of commercial vehicles falling 16.4 per cent to 15,693 units.
“We forecast that second half of 2016 would see an intensification of the overall negative trend, particularly for the passenger-car segment, and data for the third quarter has borne out this trend, with the fourth quarter likely to see a further worsening of sales performance by this segment,” it said.
BMI expects total vehicle sales in full year 2016 to record a fall of 11.2 per cent to 91,778 units. It then predicts annual growth in total vehicle sales of just 2.5 per cent in 2017, taking total sales to 94,108 units, followed by annual rises ranging between 1.1 per cent and 2.6 per cent over the period 2018 to 2020.
Oman is witnessing a drop in vehicle sales since 2014 as the decline in oil prices is reducing willingness of consumers to spend on high-value products, Alpen Capital said in its recent GCC Automobile Industry report.
Alpen Capital said Oman, the third largest automobile market in the GCC in terms of new-vehicle sales, recorded sales of 167,600 new cars in 2015, of which 72.3 per cent were passenger cars. It forecasts new passenger car sales in Oman to reach nearly 135,000 units in 2020 from 121,100 in 2015.
“Number of cars in use in Oman is expected to grow below the regional average in anticipation of a drop in new car sales in 2016 and slow recovery in the years to 2020,” Alpen Capital said. It added that the number of passenger cars in use in Oman is projected to reach over 889,000 in 2020, translating into a five-year annual average growth rate of 3.6 per cent.
“Oman has witnessed a drop in new passenger car sales in last couple of years due to the economic slowdown. This phenomenon is anticipated to continue in the short-term. Accordingly, Oman's share of the total GCC passenger cars in use is likely to drop from an estimated 7.2 per cent in 2015 to 6.8 per cent in 2020.”
The Alpen Capital report added that deregulation of petrol prices in most GCC countries amid a sluggish economic environment is likely to negatively impact demand for high-powered vehicles.
© Muscat Daily 2016
