BMI's Executive Summary

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Kuwaiti automotive sales are likely to stagnate over the next five years, but the revaluation of the Kuwaiti dinar gives Japanese and European brands hope of competing in this price-sensitive market.

BMI has made adjustments to its forecasting model for Kuwait following the recent publication of new data. We have made revisions to our GDP growth and exchange rate forecasts, due to exchange rate movements. We now estimate that automotive sales fell 0.2% in 2007, but forecast overall growth of 1.2% in 2008 with sales peaking at 112,728 units. However, sales will fall throughout the rest of the forecast period, dropped to 108,180 units by 2012, 2.9% down from 2007. Kuwait has been lagging well behind other Gulf states in terms of sales growth in recent years, due to the structure of the economy. A lack of diversification has prevented the kind of consumer boom seen in the UAE, Oman, Bahrain and Qatar, with a stagnation in the retail sector in recent years.

While we expect no dramatic slump in sales, Kuwait's automotive market is enduring a period of stagnation due to saturation. However, for Japanese and European carmakers, there is still room for growth. The revaluation of the Kuwaiti dinar has made it easier for them to compete on the Kuwaiti market, which is highly price responsive, although the tumbling value of the US dollar means that US carmakers still have a price advantage. A lack of data from autos majors makes is hard to track trends, although there are indications that the SUV segment is growing and the luxury segment is contracting. On the upside, Kuwait's logistics sector has done very well thanks to the reconstruction activity in Iraq. This mammoth project will not be completed any time soon, meaning there will be an ongoing need for Kuwaiti transportation, although the future of war-torn Iraq remains highly unclear. BMI believes that this factor should generate modest growth in the commercial vehicles market, which partly offsets the decline in car sales.

Kuwait's re-export autos market is exposed to political and economic risk in Iraq, Kuwait's largest auto market. At present, the Iraqi situation remains uncertain and demand in the automotive sector is unpredictable. Additionally, increased trade ties with Iran offer more opportunities for growth for Iranian carmakers. BMI believes that Kuwaiti re-exports will be worth US$32.5mn by 2012, up by just US$2mn over 2007 levels. For Kuwait to gain a stronger foothold in the Iraqi market, there needs to be closer trade relations between the two countries, greater political and economic stability in Iraq and increased penetration of Kuwaiti-owned dealerships in Iraq.

Contents

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Chapter 1 – SWOT Analysis

Kuwait Automotive Sector SWOT

Kuwait Economic SWOT

Kuwait Business Environment SWOT

Chapter 2 – Middle East and Africa 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: Kuwait Automotive Sector Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 5 – Macroeconomic Forecast Scenario

Table: Economic Activity

Country Snapshot: Kuwait 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

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 & 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

Industry Developments

After-Sales Services

Chapter 8 – Company Monitor

Regional Case Study: Ford

Sales

Table: Ford Dealers In Middle East & Africa

Production

Table: Ford Assembly Plants In The Middle East And Africa

Company Profiles

Arabian Motors Group (AMG)

Kuwait Automotive Imports (KAICO)

Mohamed Naser Al-Sayer & Sons (MNSS)

Abdul Rahman Albisher & Zaid Alkazemi Company

AlMulla Group

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: