Industry Trend Analysis - Consumer Sentiment And Construction Decline Driving Sales Drop - SEPT 2017

BMI View : Vehicle sales in Panama will decline in 2017, falling 9.1%, as a slowdown in economic growth weighs on consumer sentiment and growth in new car sales, while weaker construction sector activity tempers demand for commercial vehicles.

We are revising down our vehicle sales growth forecast for Panama to a decline of 9.1% in 2017, down from our previous forecast of 3.4% growth.This decline comprises a 7.5% and 23.6% fall in passenger car and commercial vehicle (CV) sales respectively by year-end. This downbeat outlook for vehicle sales in Panama will be due to the country's slower rate of economic growth and slowdown in construction sector activity which will weigh on growth in new passenger car and CV purchases. Supporting this view are market performance figures, which show that vehicle sales in Panama have fallen 13.1% y-o-y in the first four months of 2017 (4M17).

Beyond 2017, we forecast vehicle sales to decline at an average rate of 2.7% over 2018-2021, reaching annual sales of 53,787 units by 2021. This weak growth compared to the average annual growth of 12.6% between 2010 and 2015 will be the result of a deceleration of economic growth over the next five years, which will reduce levels of demand.

Turning Downbeat On 2017 Outlook
Panama - Vehicle Sales Forecasts By Segment, Units
f = BMI forecast. Source: INEC, BMI

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