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Kuwait Autos Report Q4 2012 - New Market Report Now Available

New Transportation market report from Business Monitor International: "Kuwait Autos Report Q4 2012"


Boston, MA -- (SBWIRE) -- 12/12/2012 -- Kuwait experienced a very strong H112 in terms of new car sales, which reportedly rose by 22% year-onyear (y-o-y), to reach 68,126 units. Indeed, new registrations were up by 31% y-o-y in June alone, at 10,621. Given this strong start to 2012, there are now clear upside risks to BMI's overall new vehicle sales forecast of 151,215 units for the full year.

Certainly, BMI remains upbeat on the outlook for the Kuwaiti auto sector as we approach the end of 2012, believing that the across-the-board 25% wage increase for state employees in late March 2012, alongside a 15% hike in pension entitlements, will continue to boost demand for new cars from Kuwaiti citizens over the short term. Moreover, BMI's Macroeconomic team recently revised down its forecast for average inflation in 2012, from 5.0% to 4.0%.This should allow for car loans to remain attractively priced over the short to medium term.

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Further support to new car sales should come from a continued recovery in the country's banking sector, which had been undermined by the after-effects of the global financial crisis of 2008-09. BMI's Macroeconomic Team believes that deposit growth has picked up consistently since the beginning of 2012, reaching a 30-month high of 13.6% in June 2012. This increase in overall banking sector stability should then allow Kuwaiti banks to increase their lending to the wider economy gradually, with credit growth reaching a 26-month high of 4.9% y-o-y in July. Moreover, with government spending on wages and social benefits likely to remain elevated for the foreseeable future, BMI expects deposit growth to continue accelerating through the remainder of the year, allowing banks to further expand their loan portfolios. This could well feed into easier financing for car loans for use by Kuwaiti citizens.

Beyond the current year, BMI believes that the Kuwaiti new car market can continue to show steady growth, in the order of 5% per annum, to reach over 180,000 new cars sold by the end of our forecast period in 2016. Passenger cars will continue to account for the majority of new vehicles sold in Kuwait.

In 2011, a total of 100,100 passenger cars were sold in Kuwait, according to information from the General Directorate of Traffic cited by the Al Qabas newspaper in March 2012. This represented a 27.4% annual increase from the 78,553 cars sold in the country during 2010.

At the half way point of 2012, Toyota Motor remains the dominant player in the Kuwaiti new car sales market, accounting for the top four best-selling models over the January-June period (and five out of the Top 10 in total). The Prado is the country's best-selling car, selling 6,806 units, followed by the Hilux on 3,563, the Camry on 2,533 units sold and the Land Cruiser on 2,204.

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