Boston, MA -- (SBWIRE) -- 06/11/2014 -- Early sales trends show that 2014 will be a very challenging year for automakers operating in the Algerian market, in line with BMI's forecasts. In Q114, new vehicle sales were down by nearly 30% year-on-year (y-o-y), to 85,000 units, according to an April 2014 report in El Watan. Auto imports were reportedly down by over 50% in January alone. Even the annual motor show, held in March, failed to provide a lift to sales, with dealerships reportedly having to slash prices in order to gain customers. Underlining the precarious state of the market, the local Libert? newspaper has quoted the President of the ACAA, Abderrezzak Lachachi, as stating that several dealerships will close this year.

The main reason behind the calamitous drop in sales is the fact that many Algerians are looking to rent or buy houses via a national homebuilding scheme being carried out by the Housing Development and Improvement Agency (AADL), which will clearly tie up most of their disposable income in 2014. Other factors weighing on the near-term outlook for automobile sales in Algeria include: rising congestion in major cities, a lack of parking spaces and the rising costs of owning and running a vehicle.

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Looking at wider economic trends, BMI's Country Risk team has also become more negative on the near-term macroeconomic outlook for the country, having revised down its 2014 GDP growth forecast from 4.4%, to 3.2%. Indeed, we now feel that the economy will grow below potential over the medium term.

However, while the near-term sales outlook remains bleak, there is more encouraging news on the production front. In this context, Algeria's aim of becoming a major producer of cars and commercial vehicles took another step forward at the end of April 2014, when the Algeria Press Service (APS) reported that Mercedes-Benz had produced its first HCV in Algeria, an Actros model. According to the managing director of Mercedes' local partner SNVI, Hamoud Tazrouti, the company will only be building...

The Algeria Autos Report features the latest data and forecasts covering production, sales, imports and exports.

Business Monitor International (BMI)'s Algeria Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the automotives market in Algeria.

Key Benefits

- Benchmark BMI's independent automotives industry forecasts on Algeria to test other views - a key input for successful budgetary and planning in the Algerian automotives market.
- Target business opportunities and risks in the Algerian automotives sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Algeria.
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