BMI's Executive Summary

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US majors are set to reap growth on the Bahrain automotive market, at the expense of their Japanese and European rivals. BMI forecasts a slowdown in sales in line with a decline in GDP growth, market saturation and congestion. But this should be partly offset by low car finance rates, which will provide an impetus to consumer demand for passenger cars.

The strong performance of US majors on the local market was confirmed by GM's Q307 results, which showed a 23% y-o-y increase in sales to 1,811 units. Growth was witnessed across all its brands including Chevrolet, GMC, Cadillac and Hummer. BMI believes that GM's performance is ahead of the overall market. However, Q3 figures indicate a strengthening of demand over the previous two quarters, suggesting a steady rise in overall sales growth throughout the year. Consequently, BMI has revised upwards its automotive sales estimates for 2007, from 41,000 to 42,000 units, with annual growth at around 13%, up by one percentage point over 2006. In addition to low car finance rates, growth in 2007 was supported by GDP growth of 6.8%.

While average interest rates are likely to remain at around 8.5% over the next five years, car finance rates are likely to be in the region of 4-6% in Bahrain's highly competitive car market. At the same time, we do not envisage a significant adjustment in the exchange rate, even if the Emirati dirham is revalued against the US dollar to counter the effects of depreciation against the euro. This gives US carmakers a competitive advantage on the Bahraini market against European and Japanese firms, which are suffering as a result of the appreciation of the euro and the yen. Overall market performance will be affected by saturation and declining GDP growth, which is forecast to fall to around 4.6% by the end of the forecast period. Consumer demand will also be limited by the problem of congestion in Bahrain and high rates of car ownership. In terms of segment performance, SUVs are likely to see the most robust growth, particularly given the likelihood of domestic SUV production. Overall, BMI envisages a steep downturn in automotive annual sales growth to around 5.0% from 2009.

By 2012, the automotive market should be at least one-third larger than in 2007, with annual sales reaching around 56,500 units. We expect a soft landing rather than a problematic downturn, since oil prices will remain high by historical levels, while oil-fuelled investment has boosted non-oil output capacity. Moreover, diversification efforts mean that Bahrain is less dependent on the oil market than most other Gulf States.

Contents

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Chapter 1 – SWOT Analysis

Bahrain Auto Industry SWOT

Bahrain Economic SWOT

Bahrain Business Environment SWOT

Chapter 2 – Middle East and Africa Market Overview

Table: Middle East and Africa Autos Production – Historical Data & Forecasts (CBUs unless otherwise stated)

Table: Middle East and Africa Autos Sales – Historical Data & Forecasts (CBUs unless otherwise stated)

Suppliers

Table: Africa Autos Sales 2005 By Segment

Table: Middle East Autos Sales 2005 by Segment

Special Focus – Automotive Parts In The GCC

Special Focus: Sports Utility Vehicles

Chapter 3 – Business Environment Rankings

Economics – Long-term Risk

Politics – Long-term Risk

CBU Output Growth

Vehicle Ownership/Penetration Potential

Regulation

Competitive Environment

Chapter 4 – Industry Forecast Scenario

Table: Bahrain – Automotive Industry Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 5 – Macroeconomic Forecast Scenario

Table: Bahrain – Economic Activity

Country Snapshot: Bahrain Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages Per Year

Chapter 6 – Special Focus: Commercial Vehicles

Regional Market Overview

Table: Regional Commercial Vehicle Market: Country Ranking, Sales

Table: Regional Commercial Vehicle Market: Country Ranking, Production

Table: Regional Commercial Vehicle Market: Company ranking of significant regional manufacturers

Table: Recent and Planned Investments in the Middle East and Africa

Gulf States: Bahrain, Kuwait, Saudi Arabia and United Arab Emirates

Sales

Table: Size of Commercial Vehicle Market: Gulf states (CBUs)

Table: Value of Commercial Vehicle Market: Gulf States (US$mn)

Table: Forecast Commercial Vehicle Market: Gulf States (CBUs)

Table: Forecast Commercial Vehicle Market: Gulf States (US$mn)

Production

Chapter 7 – Competitive Landscape

Table: Key Players – Bahrain Automotive Sector

Chapter 8 – Company Monitor

Regional Case Study: Ford

Sales

Table: Ford dealers in Middle East and Africa

Production

Table: Ford assembly plants in the Middle East and Africa

Company Profiles

Al Zayani Investments.

National Motor Company (Namco)

BMI Forecast Modelling

Automobile Industry

Sources

Appendix: Regional Demographic Data

Table: The Long View: Data Over The Economic Cycle (2000-2007)

Table: Population

Table: Household Spending Per Capita, US$

Table: Private Consumption Per Capita, US$ PPP

Table: Market Size, GDP, US$bn

Competitive Landscape for Middle Eastern Automotives: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Automotive Sources

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BMI's Middle Eastern Automotives Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include: