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Bahrain Autos Report Q4 2011
Business Monitor International, Sep 2011, Pages: 41
Bahrain’s auto market continues to hinge on the trajectory of pro-democracy protests and the state response to continuing unrest. Although some observers predict sharp contractions in car sales in Bahrain on the back of the turmoil, BMI notes that limited concessions and attempts to placate protestors has at least led to apparent, albeit relative, calm in the country. This led to Fitch Ratings resisting a downgrade of Bahrain’s ‘BBB’ long-term foreign currency issuer default rating in early August 2011, with the view that near-term political and economic outlook risks have at least been reduced since the government lifted a state of emergency in early June 2011. Notwithstanding a sudden deterioration in the political environment, BMI expects to see vehicle sales climb by 2.73% to 49,157 units in 2011, reaching a value of BHD355mn (US$944mn).
Until protests proliferated and began to impact Bahrain’s economic outlook, economic growth in the country provided solid upside for vehicle sales. Although GDP and wage growth in Bahrain remain key drivers of sales growth, with investment and consumption hit by political unrest, BMI does not see strong growth between 2011 and 2013, with real growth in 2011 coming in at 0.5%. Nonetheless, economic growth is set to accelerate subsequently.
Recent activity among car dealers in the country included the selection of Zayani Motors by Chinese automaker Shanghai Automotive Industry Corporation (SAIC) in late July 2011 as the exclusive dealer for the cars of its premium MG brand in the country. The partnership between SAIC and Zayani was marked by the introduction of the MG550 sedan. The partnership plans to bring the MG6, MG3, MG350 models to the Bahraini market in the coming months.
Fakhro Motors finalised agency deals with several automakers, including BYD Auto and Dongfeng Motors in April 2011. The company has also opened a workshop in Salmabad, to carry out painting and repair activities. The workshop will perform various maintenance operations for all kinds and sizes of vehicles, according to board member Mohamed Adel Fakhro.
BMI expects to see sales growth peaking at 4.05%, to 51,146 units , in 2012 – finally breaking the 50,000 unit mark – as it reaches BHD371mn (US$986mn). By the end of the forecast period in 2015, we forecast growth at 3.81% to 57,300 units, as the Bahraini auto market reaches a value of BHD423mn (US$1.13bn).
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