Industry Trend Analysis - MENA Autos: VAT Positive In The Short Term - MAY 2017
BMI View: MENA will be the third fastest growing vehicle sales market globally in 2017, dampened by declines in key markets such as Saudi Arabia and Egypt. The Saudi market will see a return to growth in the latter months, however, as consumers pre-empt the introduction of VAT in 2018.
We forecast total vehicle sales growth of 3.5% in the Middle East and North Africa (MENA) region in 2017, ranking third globally behind Latin America and Asia. Within that aggregate forecast, the combined markets of the Gulf Co-operation Council (GCC) will again underperform, but the introduction of a value-added tax (VAT) in 2018 will provide a short-term bump to sales.
In terms of vehicle segments, we expect the marginal outperformance of the passenger car segment over the commercial vehicle segment to continue, as government spending on major projects, particularly in the GCC, is restricted, feeding through to dampened demand for heavy vehicles used in these projects. This is reflected in our forecast for 3.7% growth in passenger car sales and 2.1% growth in commercial vehicle sales.
|MENA Middle Of The Pack|
|Vehicle Sales Growth By Region (% chg y-o-y)|
|f = forecast. Source: BMI|