Quotas And Parallel Sales Threaten Dealers
Tunisian car dealers will face a tough 2013, after the Ministry of Commerce has further delayed a decision on the total volume of import quotas for the year. Indeed, the quotas released so far amount to only 25% of 2012's passenger car market, which posted 15% growth. Compounding this artificial limit on sales, is a condition to maintain the same pricing levels as 2012, while a further threat comes from the parallel import market as it gathers momentum.
Dealers also report that quotas are unevenly distributed, which will skew the competitive landscape. France's Renault , which led the market in 2012, looks set to maintain its lead as dealer Artes (also selling Nissan and Dacia vehicles), has been awarded the biggest quota of 1,895 units. This is a 17.9% share of the total 10,609 units allocated. Ennakl, which represents the Volkswagen Group , is close behind with a quota of 1,750.
European brands dominate the market, with Peugeot , Citroen and Fiat (including Iveco ) following Renault and Ennakl . Indeed, if Peugeot and Citroen were combined, the PSA group would easily surpass the top two with a total allocation of 2,438 units, although each brand has a separate dealer in the country.
|Source: Ministry of Commerce|
|Artes and Adev||Renault, Nissan, Dacia||1,895|
|Ennakl||VW, Audi, SEAT||1,750|
|Afrique Auto||General Motors Company||541|
|Le Moteur||Mercedes, Mitsubishi||263|
|Ben Jamaa Motors||BMW||90|
|Sayara||Volvo, Volvo Cars||48|
|Le Moteur Diesel||Iveco||29|
|Alfa International||Hyundai, Rover||15|
According to information from commercial departments, the quotas are allocated partly on the basis of investment between the carmakers and local component producers, which suggests a high level of European investment in the sector. This also aligns with Renault's strategy of investment and expansion in North Africa, and indeed the wider Middle East and North Africa region (see our online service, August 10 2012, 'Renault Expansion Targets New Growth Markets').
The consumer should be the real winner in 2013, however, as dealers have been asked to freeze prices at 2012 levels. According to local reports, this will effectively result in a 2-3% discount on the price already agreed between the dealers and carmakers. Based on the expectations of BMI's Middle East and North Africa team for steady private consumption growth in 2013, we would expect consumers to be in a position to take advantage of this pricing structure.
There will be a further financial threat to dealers, however, as the ministry has also requested that payments are made to manufacturers in no less than 180 days. This will give more time for interest to accrue on the due payments and squeeze dealers who are already charging lower prices than planned.
|Tunisia - Parallel Vehicle Imports By Month 2012 (CBUs)|
In terms of competition, the parallel import market provides another significant threat. In 2012, the segment accounted for around 30% of total new imports and faces fewer regulatory hurdles than the authorised dealers. Total parallel imports in 2012 reached 17,125 units, which is already 61.5% higher than the total allocated for 2013 so far. Assuming consumers turn to the parallel import market where vehicles are not available from authorised dealers, the year could mark a dramatic switch in terms of market share for parallel and authorised importers.