Boston, MA -- (SBWIRE) -- 11/27/2012 -- Elevated government spending, strong banking sector credit and consequently strong private consumption in Bahrain have prompted BMI to slightly revise up its new vehicle sales forecast for 2012. We now expect the market to shift a total of 52,900, against the estimated 50,400 vehicles sold in 2011- growing nearly 5% y-o-y, compared with the 3.5% y-o-y growth expected earlier.

For the rest of the forecast period to 2016, however, we do not expect the market to maintain this growth momentum and expect sales growth to average close to 4% y-o-y between 2013 and 2016 - reaching 62,100 by the end of the forecast period. Uncertain political scenario, weakened tourism sector and marginal prospects from vehicle replacement will be key factors dampening growth in the sector.

However, the industry continues to witness strong interest from international carmakers, particularly those involved in the premium vehicle and commercial vehicle segment. In September 2012, Rolls-Royce Motor Cars' dealer in Bahrain, Euro Motors, launched a pre-owned Rolls-Royce scheme - Rolls-Royce Provenance programme - in the country. A similar scheme was also launched by the official dealer of Mercedes-Benz, Al Haddad.

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Meanwhile, prospects for growth in the country's construction industry are attracting commercial vehicle manufacturers. As recently as June 2012, First Motors, the exclusive distributor of South Korean automaker Hyundai Motor's vehicles in Bahrain, launched new medium and heavy Hyundai commercial vehicles in the market. In April 2012, MAN Truck & Bus Middle East revealed it plans to increase focus on the Bahraini market through its local partner Ahmed Mansoor Al A'ali Co. BSC. The carmakers are eyeing the growth opportunities in the transportation sector arising from the government's US$3.2bn investment in residential construction and the total US$10bn construction projects due to go on stream between 2012 and 2016.

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