Industry Trend Analysis - Import Quotas Drive Exports To Outpace Imports - DEC 2017


BMI View : Algeria will transition from a net importer to a net exporter of vehicles in 2019 . T his will occur as its new import quotas take hold and its utilisation of installed vehicle production capacity increases in order to take up the supply shortage in the domestic market and to continue supplying vehicles for export.

We believe that Algeria will emerge as a net exporter of vehicles by the end of 2019, as its new import quotas take hold and as its utilisation of installed vehicle production capacity increases steadily when new vehicle production lines become operational ( see ' Investment Moratorium Dampens Sales Outlook ' , August 21). We forecast Algeria to transition from a net importer of 77,339 units in 2016 to a net exporter of 5,145 units by the end of our 2019 forecast period. This transition will result from a slowdown in domestic vehicle sales coupled with an increase in vehicle production over our 2017-2021 forecast period ( see chart below).

We forecast a drop in Algeria's local demand for new vehicles in 2017 as import quotas take hold and drive up the cost of vehicles. The paradox of locally-produced vehicles costing more than imported equivalent models will also accelerate the sales decline. Local media have reported that the locally-produced Renault Symbol costs about DZD200,000 (EUR1,600) more than its imported rival, the Dacia Logan. The same media reports state that a Hyundai i10 produced in Algeria costs EUR2,000 more than if it was imported from mainland France. These higher prices will further reduce the affordability of vehicles in Algeria and drive Algerian vehicle sales to contract 35.0% in 2017. This will be followed by an average annual contraction of 0.6% over our forecast period to 2021 as macroeconomic factors continue to weigh on market confidence ( see 'Growth To Decelerate Amid Fiscal Consolidation', February 8).

Net Exporter: Lower Domestic Sales And Increased Production
Algeria - Vehicle Production & Sales
f=BMI forecast. Source:National Sources, BMI

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