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.
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.
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.
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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%
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