Bahrain Autos Report Q4 2010
Business Monitor International, September 2010, Pages: 48
The Bahrain Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Bahrain's automotive industry.
Bahrain's economy has bounced back from the global economic crisis. Growth is expected to improve dramatically this year, in this the most economically diverse country in the Gulf region. BMI expects new car sales to continue to grow at around 3% each year – a total of 15% growth over the five-year forecasting period of 2009-2014. While this is not as heady a growth rate as can be found in other countries, the saturated nature of the market combined with the relatively low national income limits opportunities for rapid growth. Despite this, the Bahraini market remains attractive as long as more general economic fears are resolved in the near future.
Bahrain's economy took a blow in August as Moody's Investor Services downgraded the Gulf country's credit rating to A3. While this is still an investment grade rating, it is the lowest out of any of the Gulf countries. This decision is largely due to the Bahraini government's dependence on oil revenues to fund expenditure. The country's break-even point, that is, the price of oil at which government expenditure is covered, is one of the region's highest at US$80. As of the end of August, oil prices have been hovering at just above US$70 a barrel – an indication of the predicament Bahrain finds itself in. These problems are exacerbated by the size of Bahrain's banking system, which greatly overshadows the country's economy and which is thought to be somewhat exposed to global problems, including the continuing difficulties in Dubai. While these problems are shared by many other Gulf states, Bahrain has relatively low foreign exchange reserves with which to cover any potential losses.
Beyond the banking system, analysts have reiterated that while Bahrain's economy is one of the most diversified in the region, this diversification has not yet begun to pay-off. Corporate taxes, which were introduced in 2009, have been difficult to collect and have been unpopular with foreign firms that were attracted by the liberal business regime. However, the IMF is confident that the fiscal situation will improve dramatically in 2010. While 2009's budget deficit stood at 7.3% of GDP, the IMF expects that 2010's deficit will be 0.8% of GDP. This will largely be driven by expected GDP growth of 4.6% – one of the fastest in the region and a substantial improvement over 2009's 2% growth. The Financial Times reports that Moody's analysts have stated that growing sectarian tensions impacted the decision to downgrade the country's credit rating. Parliamentary elections are scheduled for October and troubles are growing between the Shia majority and the predominantly Sunni ruling class.
Overall, BMI expects that these issues will not pose a threat to Bahrain's continued economic growth. Over the coming years diversification will begin to reap substantial benefits for the Gulf state. The economic growth caused by this process will drive higher auto sales and will create sustainable growth in this established auto market.
Executive Summary
SWOT Analysis
Bahrain Auto Industry SWOT
Political SWOT Analysis
Economic SWOT Analysis
Business Environment SWOT
Regional Overview
Change Ahead For The GCC
Trouble In South Africa And Turkey, Uncertainty In Iran
Impact On Production
Business Environment Ratings
Table: Middle East And Africa Business Environment Ratings
Industry Forecast Scenario
Table: Bahrain – Auto Industry Historical Data And Forecasts
Macroeconomic Forecast Scenario
Competitive Landscape
Table: Bahrain Auto Sector – Key Players
Regional Developments
Regulation
Company Monitor
Regional Case Study: Nissan Motor
Production
Table: Nissan MEA Production Facilities
Sales
Table: Nissan MEA Distributors
Company Profiles
Al Zayani Investments
National Motor
Country Snapshot: Bahrain Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Employment Indicators
Consumer Expenditure, 1999-2004 (US$)
Average Annual Wages
BMI Methodology
How We Generate Our Forecasting Model
Sources
- Al Zayani Investments
- National Motor
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