Botswana Autos Report Q2 2012
Business Monitor International, February 2012, Pages: 29
Business Monitor International's Botswana Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Botswana's automotive industry.
Botswana's domestic new vehicle market, like many in the region, is a small fraction of the country's total car fleet, as used cars dominate the landscape. Although the used car segment is still popular in many African markets, sales of new passenger cars in Botswana grew by over 20% in 2007, 2008 and 2010, although they did dip in 2009 owing to the effects of the global financial crisis.
Like in the previous quarter, BMI still believes that this level of growth may be difficult to achieve again for a number of reasons.
BMI is forecasting real GDP growth in Botswana of 5.4% in 2012 and 5.5% in 2013. While this is solid growth, our estimate of a 4.8% rise in 2011 is a downward revision from a previous forecast of 5.1% and a slip from 7.2% in 2010. This is largely based on a drop in household consumption, which BMI believes will feed into the purchase of high-end goods such as cars. Having said this, passenger car sales growth of 10.6%, which BMI estimates for 2011, is still respectable and would represent a neardoubling of the segment's volume over a five-year period. However, BMI forecasts that annual car sales growth will average just 8.1% in 2012-2016. Sales are expected to total 0.04mn by the end of our forecast period in 2016.
Commercial vehicles are expected to outperform the car segment, owing to growth in key industrial sectors such as mining and construction. As the government looks to diversify the economy away from a dependence on diamond exports (though diamonds comfortably remain the country's main export (accounting for 70% of total exports according to the latest trade statistics), we would expect further growth in these other industries to generate further demand for commercial vehicles. BMI forecasts growth in the total commercial vehicle segment of more than 20% in 2012 and 2013 as companies looking to move into these sectors invest in fleets, slowing to a more sustainable average of 15.3% for 2013-2016.
One development that should support increased vehicle ownership in general, however, is a road improvement project. In August 2011, the OPEC Fund for International Development agreed to loan the government of Botswana US$40mn to help fund a project to improve 827km of roads in rural and semi-urban areas. The World Bank will contribute a further US$186mn towards the total US$385.12mn budget, with Botswana's government providing the remainder.
With no domestic mass production, the new vehicle market is largely composed of imports, and based on the most recent available statistics, Japanese brands are the most popular. Though somewhat dated, the Transport Communications Unit released a report in July 2011 showing that Toyota Motor accounted for 40% of imported new vehicles in 2009. It was followed by Nissan Motor in second and Mazda Motor in fourth. Germany's Volkswagen was in third place.
Executive Summary
SWOT Analysis
Botswana Political SWOTs
Botswana Economic SWOTs
Botswana Business Environment SWOTs
Global Overview
Eurozone And EMs Pose Risks To 2012 Growth Outlook; US And Japan On The Rise
Passenger Car Sales (Units), Jan-December 2011
Replacement Growth?
Business Environment Ratings
Table: Sub-Saharan Africa Autos Risk/Reward Ratings
Regional Overview
BMI Highlights Its Favourite Opportunities In Sub-Saharan Africa
Macroeconomic Forecast Scenario
Table: Botswana - Economic Activity
Industry Forecast Scenario
Table: Botswana Automotives 2009-2016
Competitive Landscape
Market Overview
Company News Alert
JLR Investment Targets Increased Buying Power
BMI Methodology
How We Generate Our Industry Forecasts
Sources
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