Industry Trend Analysis - New Car Market To Remain Small Despite Rising Income Levels - SEPT 2017

BMI View : The robust speed of growth in income levels in Cambodia will not be enough to push consumers into the new car market as high prices on these vehicles remain a significant barrier. We therefore expect Cambodians to continue to depend on the used car market as an entry point towards vehicle ownership.

We believe that a rise in income levels in Cambodia will not be enough to counter the dominance of the used car market in the country over our 2017-2021 forecast period. We forecast new car sales in Cambodia to grow at an average annual rate of 16.6% over the next five years, making it one of the best performing autos markets in the Association of South East Asian Nations (ASEAN) region. This will be down to expanding economic growth, underpinned by robust private consumption ( see ' Cambodia, Philippines And Vietnam To Lead ASEAN Car Sales ' , February 14).

Despite this, we expect new car sales to make up a small percentage of overall car sales. By using our data for new passenger car sales and fleet size, we forecast new cars to account for an average of 7.6% of the country's total car fleet to 2021, meaning that used car purchases will continue to outweigh those of new cars in the local market.

Used Cars Will Continue To Dominate Local Market
Cambodia - New Car And Used Car Sales, Units
e/f = BMI estimate/forecast. Source: AJTP, BMI

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