Industry Trend Analysis - Cars To Outperform CVs Over Next Five Years - AUG 2017
BMI View: W e expect a robust growth outlook for the Tanzanian economy in 2017 to help drive growth of 20.5% in domestic vehicle sales, reaching 91,767 units. Over the year, we expect a positive outlook for the Tanzanian consumer to support an expansion in the passenger car segment, while the construction of infrastructure projects will drive dem and for commercial vehicles .
We expect strong economic growth to continue fuelling consumer confidence in Tanzania, thereby supporting spending on big-ticket items including new and used car purchases. We hold a bright growth outlook for the Tanzanian economy, which will be supported by robust infrastructure investment and strong household spending. Our Country Risk team forecasts real GDP growth of 6.3% in 2017, outperforming the Sub-Saharan Africa (SSA) regional growth average of 3.1%.
Over our 2017-2021 forecast period we expect robust private consumption and continued infrastructure development to translate into average annual growth of 20.3% in vehicle sales. This period will be characterised predominantly by passenger car sales (average annual growth of 22.7%) outpacing CV (commercial vehicle) growth (average annual growth of 11.7%).
|Robust Growth In Consumer Spending Bodes Well For Car Demand|
|Tanzania - Real Private Consumption Growth, % chg y-o-y|
|f = BMI forecast. Source: UN, BMI|