Recently published research from Business Monitor International, "Qatar Autos Report Q1 2014", is now available at Fast Market Research
Boston, MA -- (SBWIRE) -- 12/20/2013 -- BMI remains upbeat on the medium-term outlook for the Qatari auto sector. Although full-year sales figures for 2013 may come in slightly below our forecasts, based on sales trends over H113, we retain an optimistic outlook on the auto sector. This is based on rising government expenditure, a growing population and increased spending on construction ahead of Qatar's hosting of the 2022 FIFA Football World Cup.
At the halfway stage of 2013 new vehicle sales in Qatar were reportedly up by just 2%, at 42,400 units. This would imply some downside risks to BMI's current growth forecast for the full year. However, we remain confident that growth will remain in positive territory over the remainder of the year.
There are several reasons behind our continued optimism towards the Qatari new vehicle sales market. First, our Country Risk team is forecasting GDP growth of 5% for 2013, falling slightly to 4.8% in 2014. Encouragingly for the longer-term development of the Qatari economy, we believe that growth will continue to be largely driven by the non-hydrocarbon sector. In particular, expanding domestic consumption and progress on infrastructure investments, both supported by public spending, will help to stimulate economic activity. We believe that fiscal policy will remain strongly supportive of economic growth, with the government having signalled its intention to increase both current spending and investment expenditure over FY2013/14.
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Adding further support to the autos sector is the fact that we expect 8.0% growth in private consumption in Qatar over 2013. Although the effects of increases to salaries and pensions of public sector workers, approved in September 2011, are waning, an array of structural factors is set to leave household spending on an expansionary path over the medium term. Demographics also remain largely in Qatar's favour: the total population stood at 1.86mn in August 2013, up by 9.6% on a six-month moving average basis (albeit down from earlier in the year due to seasonal effects). As more expatriate workers enter the country in preparation for the 2022 FIFA World Cup, the consumer base is set to expand further.
Although overall headline vehicle sales appear to have only risen slightly year-to-date, individual dealership sales figures over H113 appear much stronger. As an example, Alfardan Automobiles, the importer of German premium carmaker BMW cars in Qatar, posted a 28% year-on-year (y-o-y) and 9% y-o-y rise in sales of BMW and MINI vehicles respectively in H113. The carmaker forecasts a strong performance for the remainder of the year on the back of new models to be launched and a focus on customer satisfaction, according to Mohammed Kandeel, the general manager of Alfardan Automobiles.
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