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West and Central Africa Autos Report Q2 2012
Description:
Business Monitor International's West and Central Africa Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on West and Central Africa's automotive industry.
Eurozone And EMs Pose Risks To 2012 Growth Outlook; US And Japan On The Rise Signs of significant slowdown in the key global autos markets in 2012 are beginning to emerge. Our core scenario envisages the US and Japan as a significant outperformers in the mature autos markets category. Within the emerging markets sphere, we see an overall cooling down in passenger car demand, and highlight Brazil and China as markets with the most downside potential. On a global level, we expect the eurozone markets to struggle to achieve growth on the back of our broader expectations of a mild recession, with a 0.3% year-on-year (y-o-y) contraction in real GDP during 2012.
Replacement Growth?
In 2011, the US outperformed BMI's already optimistic forecast of 7% y-o-y growth in passenger cars, posting sales of 6.17mn units - almost 9% y-o-y. Although overall consumer sentiment has been plummeting, US consumers have shown an increased propensity for durable goods. The passenger car segment specifically benefitted from improved access to credit, low borrowing costs and declining unemployment rates. In 2012, we expect the market to maintain a healthy growth rate of close to 4% y-o-y as we expect continued credit availability - owing to falling auto loan delinquencies - and an increase in vehicle replacements, as the average age of cars has reached a 15-year high of 11 years. In Japan, we expect 7.2% y-o-y growth during 2012, with the market an outperformer among the mature markets. Sales during 2011 fared slightly better than BMI's expectation of a nearly 18% y-o-y drop, with declines of just over 16% y-o-y as demand took a hit from the earthquake and tsunami in March 2011. In a market typically characterised by saturated autos demand and the rising cost of ownership, we expect the unusual 7.2% y-o-y growth to mainly come from pent-up replacement demand resulting from poor vehicle availability due to production disruptions in Japan and Thailand. The market will, however, remain far from recovery, with 2012 sales of 3.78mn cars 14% lower than the pre-crisis level of 2007.
European Trouble
The eurozone will prove to be a major disappointment in 2012 owing to poor showings from the key Western European markets and a weakened recovery in export-dependent emerging Europe. A deterioration in our outlook and the subsequent downgrades in real GDP growth forecasts for key Western European markets have prompted us to significantly revise down our outlook for new car sales in Western Europe (including Germany, France, Italy, Spain and the UK). Although we continue to expect car sales in Germany and the UK to remain in positive growth territory, forecasts for both markets have been downgraded in view of the intensifying eurozone debt crisis. Spain and Italy will once again fail to return to positive growth, owing to high unemployment rates and aggressive fiscal austerity measures due in 2012. In total, we expect new passenger car sales to contract more than 2% y-o-y, after a 2.6% y-o-y contraction in 2011.
Meanwhile, a recovery in consumer confidence and hence car sales in emerging Europe has been hampered by the deepening crisis in Western Europe. Eurozone dependence, lending restrictions from banks and fiscal austerity at home have resulted in a complete reversal of BMI's outlook for car sales in Hungary.
We now expect Hungarian sales to contract at least 1.4% y-o-y in 2012, compared with 13.5% growth expected earlier (see 'BMI Reverses Outlook For Autos Recovery', January 5, on our online news service). The outlook for the Polish and Romanian markets has also taken a turn for the worse, with sales growth of -2% y-o-y and 2% y-o-y respectively forecast during 2012. We are currently forecasting only marginal growth of 0.3% y-o-y in car sales in the region during 2012, but there could be significant downside risks to this scenario if the crisis hurts demand in smaller markets, which have so far maintained their positive growth rates.
Perhaps the only bright spot in the European autos market will be Russia, where we expect light vehicle sales to grow 10.5% y-o-y, after an impressive 39% y-o-y growth in 2011. In addition to 2012, we expect Russia to continue outperforming the broader emerging European region throughout the forecast period (see 'Optimism Far From Over For Foreign Carmakers', January 13, on our online news service).
Emerging Risk
There are more risks on offer from the key emerging markets. Chinese car sales finished 2011 only 5.2% higher than 2010, at 14.5mn units, owing to the withdrawal of tax breaks and subsidies and a cap on the number of registrations allowed in Beijing and several other big cities that followed suit. Although we expect some pent-up demand to lead to slightly higher sales growth of 8% y-o-y in 2012, we warn that ongoing measures to curb congestion and pollution and the possibility of a hard landing for the economy will provide a major downside risk to our projections.
In Brazil, an increase in default rates on cars and continued delays in loan repayments are setting the stage for a significant moderation in vehicle credit growth and hence demand during 2012. On the back of our expectation of restricted credit to consumers and overall inflationary pressures in the country, we are currently forecasting new car sales growth to slow to just above 5% y-o-y in 2012 - significantly lower than the nearly 10% y-o-y growth expected in 2011 and the average 16% y-o-y growth seen between 2006 and 2010.
Eurozone And EMs Pose Risks To 2012 Growth Outlook; US And Japan On The Rise Signs of significant slowdown in the key global autos markets in 2012 are beginning to emerge. Our core scenario envisages the US and Japan as a significant outperformers in the mature autos markets category. Within the emerging markets sphere, we see an overall cooling down in passenger car demand, and highlight Brazil and China as markets with the most downside potential. On a global level, we expect the eurozone markets to struggle to achieve growth on the back of our broader expectations of a mild recession, with a 0.3% year-on-year (y-o-y) contraction in real GDP during 2012.
Replacement Growth?
In 2011, the US outperformed BMI's already optimistic forecast of 7% y-o-y growth in passenger cars, posting sales of 6.17mn units - almost 9% y-o-y. Although overall consumer sentiment has been plummeting, US consumers have shown an increased propensity for durable goods. The passenger car segment specifically benefitted from improved access to credit, low borrowing costs and declining unemployment rates. In 2012, we expect the market to maintain a healthy growth rate of close to 4% y-o-y as we expect continued credit availability - owing to falling auto loan delinquencies - and an increase in vehicle replacements, as the average age of cars has reached a 15-year high of 11 years. In Japan, we expect 7.2% y-o-y growth during 2012, with the market an outperformer among the mature markets. Sales during 2011 fared slightly better than BMI's expectation of a nearly 18% y-o-y drop, with declines of just over 16% y-o-y as demand took a hit from the earthquake and tsunami in March 2011. In a market typically characterised by saturated autos demand and the rising cost of ownership, we expect the unusual 7.2% y-o-y growth to mainly come from pent-up replacement demand resulting from poor vehicle availability due to production disruptions in Japan and Thailand. The market will, however, remain far from recovery, with 2012 sales of 3.78mn cars 14% lower than the pre-crisis level of 2007.
European Trouble
The eurozone will prove to be a major disappointment in 2012 owing to poor showings from the key Western European markets and a weakened recovery in export-dependent emerging Europe. A deterioration in our outlook and the subsequent downgrades in real GDP growth forecasts for key Western European markets have prompted us to significantly revise down our outlook for new car sales in Western Europe (including Germany, France, Italy, Spain and the UK). Although we continue to expect car sales in Germany and the UK to remain in positive growth territory, forecasts for both markets have been downgraded in view of the intensifying eurozone debt crisis. Spain and Italy will once again fail to return to positive growth, owing to high unemployment rates and aggressive fiscal austerity measures due in 2012. In total, we expect new passenger car sales to contract more than 2% y-o-y, after a 2.6% y-o-y contraction in 2011.
Meanwhile, a recovery in consumer confidence and hence car sales in emerging Europe has been hampered by the deepening crisis in Western Europe. Eurozone dependence, lending restrictions from banks and fiscal austerity at home have resulted in a complete reversal of BMI's outlook for car sales in Hungary.
We now expect Hungarian sales to contract at least 1.4% y-o-y in 2012, compared with 13.5% growth expected earlier (see 'BMI Reverses Outlook For Autos Recovery', January 5, on our online news service). The outlook for the Polish and Romanian markets has also taken a turn for the worse, with sales growth of -2% y-o-y and 2% y-o-y respectively forecast during 2012. We are currently forecasting only marginal growth of 0.3% y-o-y in car sales in the region during 2012, but there could be significant downside risks to this scenario if the crisis hurts demand in smaller markets, which have so far maintained their positive growth rates.
Perhaps the only bright spot in the European autos market will be Russia, where we expect light vehicle sales to grow 10.5% y-o-y, after an impressive 39% y-o-y growth in 2011. In addition to 2012, we expect Russia to continue outperforming the broader emerging European region throughout the forecast period (see 'Optimism Far From Over For Foreign Carmakers', January 13, on our online news service).
Emerging Risk
There are more risks on offer from the key emerging markets. Chinese car sales finished 2011 only 5.2% higher than 2010, at 14.5mn units, owing to the withdrawal of tax breaks and subsidies and a cap on the number of registrations allowed in Beijing and several other big cities that followed suit. Although we expect some pent-up demand to lead to slightly higher sales growth of 8% y-o-y in 2012, we warn that ongoing measures to curb congestion and pollution and the possibility of a hard landing for the economy will provide a major downside risk to our projections.
In Brazil, an increase in default rates on cars and continued delays in loan repayments are setting the stage for a significant moderation in vehicle credit growth and hence demand during 2012. On the back of our expectation of restricted credit to consumers and overall inflationary pressures in the country, we are currently forecasting new car sales growth to slow to just above 5% y-o-y in 2012 - significantly lower than the nearly 10% y-o-y growth expected in 2011 and the average 16% y-o-y growth seen between 2006 and 2010.
Contents:
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?
Industry Risk/Reward Ratings
South Africa Leads New BMI Ratings
Table: Sub-Saharan Africa Autos Risk/Reward Ratings
Regional Overview
BMI Highlights Its Favourite Opportunities In Sub-Saharan Africa
Cameroon BMI View
Macroeconomic Forecast Scenario
Table: Cameroon - Economic Activity
Industry Forecast Scenario
Table: Cameroon's Automotive Market, 2009-2016
Competitive Landscape
Market Overview
Cote d’Ivoire BMI View
Macroeconomic Forecast Scenario
Table: Cote D'Ivoire - Economic Activity
Industry Forecast Scenario
Table: Cote d'Ivoire's Automotives Market, 2009-2016
Gabon BMI View
Macroeconomic Forecast Scenario
Industry Forecast Scenario
Table: Gabon Automotives Sales 2009-2016
Competitive Landscape
Market Overview
Ghana BMI View
Macroeconomic Forecast Scenario
Table: Ghana - Economic Activity
Industry Forecast Scenario
Table: Ghana Automotives Historical Data & Forecasts
Competitive Landscape
Company Monitor
Company News Alert - JLR Investment Targets Increased Buying Power
BMI Methodology
How We Generate Our Industry Forecasts
Automobile Industry
Sources
Eurozone And EMs Pose Risks To 2012 Growth Outlook; US And Japan On The Rise
Passenger Car Sales (Units), Jan-December 2011
Replacement Growth?
Industry Risk/Reward Ratings
South Africa Leads New BMI Ratings
Table: Sub-Saharan Africa Autos Risk/Reward Ratings
Regional Overview
BMI Highlights Its Favourite Opportunities In Sub-Saharan Africa
Cameroon BMI View
Macroeconomic Forecast Scenario
Table: Cameroon - Economic Activity
Industry Forecast Scenario
Table: Cameroon's Automotive Market, 2009-2016
Competitive Landscape
Market Overview
Cote d’Ivoire BMI View
Macroeconomic Forecast Scenario
Table: Cote D'Ivoire - Economic Activity
Industry Forecast Scenario
Table: Cote d'Ivoire's Automotives Market, 2009-2016
Gabon BMI View
Macroeconomic Forecast Scenario
Industry Forecast Scenario
Table: Gabon Automotives Sales 2009-2016
Competitive Landscape
Market Overview
Ghana BMI View
Macroeconomic Forecast Scenario
Table: Ghana - Economic Activity
Industry Forecast Scenario
Table: Ghana Automotives Historical Data & Forecasts
Competitive Landscape
Company Monitor
Company News Alert - JLR Investment Targets Increased Buying Power
BMI Methodology
How We Generate Our Industry Forecasts
Automobile Industry
Sources
Companies Mentioned
-JLR
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