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Flash Reports

MENA September. Regional sales are losing for the 4th year in a string

MENA Car Market Aston_Martin-DB11_V8-2018

MENA Car Market in the first nine months of the 2018 is further losing projecting the year down for the fourth year in a string, having lost over 1 million sales from the 2014 record. Saudi Arabia is dragging down the region, while Algeria and Iraq are recovering.

Economic Environment

MENA economy expanded 2.2% annually in the third quarter. If confirmed, this would mark a slight deceleration from the second quarter’s 2.4% growth.

Regional big-hitters Egypt and Israel both recorded robust—albeit more moderate—Q3 GDP outturns. In Israel, private and public consumption drove growth in seasonally-adjusted annualized rate (SAAR) terms, while Egypt should have benefited from structural reforms. Moreover, Morocco saw an uptick in growth thanks to a strong agricultural sector, while preliminary data for Tunisia signaled a weaker expansion, due to a downturn in the manufacturing sector.

Although oil-exporting countries are still to report official national accounts figures for the third quarter, economic activity was in most cases likely firm, buttressed by higher oil prices and crude output. Most countries—in particular Saudi Arabia—ramped up production in Q3, to fill the gap left by output declines from Venezuela and Iran. However, Iran itself likely endured a torrid third quarter as the first wave of U.S. sanctions bit hard, with inflation surging, the rial tanking and oil production plunging.

Market Trend

The automotive industry in the Middle East and North Africa region has stopped its growth in the 2014, immediately after having hit the 3 million units milestone for the first time.

Since 2014 the market declined to 2.1 million units in the 2017 and will further lose this year.

The key reason of the decline is related to the fall of oil price in the international market, which created deficit in Gulf countries, moving governments to apply restrictive economic policy and to increase taxes, with VAT introduced for the first time in Saudi Arabia and UAE. Additional reason for the Algerian market fall are related to the new automotive national plan, introduced in the 2014, which killed the market.

  Sales 2012 Sales 2013 Sales 2014 Sales 2015 Sales 2016 Sales 2017
Algeria 351.059 431.040 340.498 265.485 130.721 102.041
Bahrain 46.696 54.323 62.239 65.042 49.807 38.260
Egypt 220.864 213.060 284.248 278.587 215.205 141.344
Iraq 119.976 117.588 113.529 65.913 32.731 39.721
Israel 204.938 212.670 239.741 254.748 286.701 281.557
Jordan 23.040 29.412 69.583 61.774 44.950 45.312
Kuwait 125.930 154.545 162.258 161.577 115.312 106.551
Lebanon 35.477 36.109 37.816 39.361 38.647 52.429
Libya 29.000 45.000 47.250 25.440 19.334 20.301
Morocco 130.248 120.642 121.904 131.777 163.551 168.593
Oman 202.740 217.924 214.896 201.169 158.490 148.039
Palestine 36.600 35.800 37.590 37.602 37.602 39.482
Qatar 83.913 90.249 100.128 96.581 72.945 54.280
Saudi Arabia 691.942 746.857 821.635 844.437 698.059 544.364
Syria 46.053 43.100 23.955 14.297 9.158 7.978
Tunisia 48.715 47.960 53.490 57.640 60.518 63.678
UAE 291.637 342.524 391.425 408.154 311.022 275.833
Yemen 5.615 14.696 6.176 8.658 3.025 3.938
Total 2.694.442 2.953.499 3.128.360 3.018.241 2.447.779 2.133.702

In th 2018 data year to date September report for a sales volume at 1.47 million (-5.3%) with the regional performance dragged down by heavy lost in Saudi Arabia, down 20%, and in the second largest market, Israel, down 5.5%. On positive tone Algeria, thanks to the start-up of several local plants and up 26.9%, and Iraq, after the end of civil war, up 46.8%

Rank 2018 Rank 2017   Sales 2018 Variation 2018 Mix on region
7 8 Algeria 90.364 26,9% 6,1%
14 15 Bahrain 28.281 2,9% 1,9%
5 6 Egypt 108.947 9,5% 7,4%
9 13 Iraq 40.598 46,8% 2,8%
2 2 Israel 224.967 -5,5% 15,3%
15 12 Jordan 22.200 -27,4% 1,5%
8 7 Kuwait 78.509 6,1% 5,3%
12 11 Lebanon 33.108 -6,4% 2,3%
16 16 Libya 15.987 5,0% 1,1%
4 4 Morocco 123.360 -3,3% 8,4%
6 5 Oman 97.111 -5,7% 6,6%
13 14 Palestine 31.092 5,0% 2,1%
11 10 Qatar 38.317 -7,9% 2,6%
1 1 Saudi Arabia 302.074 -20,4% 20,5%
17 17 Syria 7.982 28,9% 0,5%
10 9 Tunisia 39.343 -10,4% 2,7%
3 3 UAE 184.464 -7,2% 12,5%
18 18 Yemen 3.834 29,4% 0,3%
Total 1.470.539 -5,3% 100,0%

(1987)