The GCC will experience the slowest vehicle sales growth of all sub-regions within the Middle East and North Africa region, according to a new report from BMI Research.
According to the report, vehicle sales growth in the GCC will grow at 3 percent, with the recovery of many local markets prolonged by ongoing consumer pressures and the slow speed of economic diversification efforts.
BMI forecasts the strongest growth to come from Saudi Arabia, which, at 4 percent growth, will perform marginally better than its GCC neighbours.
“This 4 percent growth for Saudi Arabia is actually quite low, given that sales have fallen by over 20 percent in 2016 and 2017,” the report noted. “It also leaves volumes far below their previous levels, at just over 550,000 units, compared with over 870,000 in 2015.”
Additionally, BMI predicts that the kingdom’s lifting of a ban on female drivers will not create a spike in car sales.
“Firstly, the ban will not be lifted until June 2018, which means there are only six months for it to impact the market,” the report noted. “Secondly, women are currently driven by family drivers, which means the family already owns a car that they can drive.
Finally, there could still be cultural barriers to buying a car – conservative banks that are reluctant to lend to women for cars, or a need to seek permission to buy [a] car in traditionalist families,” the report added.
Vehicle sales are expected to grow 3.8 percent in the UAE, a number which BMI expects to grow because its diversified economy has enabled a quicker recovery from the impact of lower oil prices.
Overall, BMI expects vehicle sales in the Middle East and North Africa to grow by 7.2 percent in 2018, following a 5.8 percent decline in 2017. Despite the growth, the report notes that expected sales volumes of 3.75 million units will be far below the 4.28 million sold in 2014.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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