Recently published research from Business Monitor International, "Egypt Autos Report Q1 2013", is now available at Fast Market Research
Boston, MA -- (SBWIRE) -- 03/18/2013 -- Despite the downgrades to our sales and production forecasts in Q412, we still believe there is growth potential in Egypt.
Egypt is the Arab world's most populous state, with approximately 80mn people. It is the region's traditional cultural hub and potentially the leader of the Arab world. Car ownership in Egypt is low even compared with the standards of developing countries, at 32 cars per 1,000 people. This compares with 109 in neighbouring Algeria and 128 in China. Egypt also boasts a large youth population and is experiencing a 'youth bulge', according to US-based Population Reference Bureau, which claims one in five Egyptians is aged between 15 and 24, with one half of the population under 25. A new government may still also trigger a broader rise in consumer confidence.
Our optimism is backed by a few encouraging developments in the country announcements from carmakers in the country.
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Passenger car sales in Egypt rose 11% year-on-year (y-o-y) to 13,376 units, in October 2012, according to Egypt's Automotive and Marketing and Information Council (AMIC), which has forecast a 3% annual increase in overall passenger car sales for 2012. This came after the council estimated that total auto sales fell by 33% y-o-y over the January-August 2011 period, to just 111,108 vehicles. We estimate sales dropped over 31% the full year, to 117,395 units. We estimate output was down nearly 30%, with around 81,000 vehicles produced.
Ghabbour Auto (GB Auto), Egypt's only listed automaker, registered a 25% increase in net income to EGP92.5mn (US$15mn) in H112, according to figures released by the stock exchange in August. The automaker represents one-third of the passenger car market, which has increased rapidly owing to easier availability of credit, a variety of cheaper Asian vehicles and a growing population. However, it did report a 26.5% y-o-y drop in net income to EGP65.4mn (US$10.7mn) for Q312 and its market share during the month of October 2012 drop below its normal rate of 22%, according to the AMIC. The drop came as a result of supply constraints following labour strikes at Hyundai Motor, said CEO Raouf Ghabbour.
Hyundai management declared that supply returned to normal levels in mid-October, which means GB Auto will likely recover its normal market share in November and December. Its overall market share during the year stands at 30%. Additionally, 400 taxis were sold under the government's taxi replacement programme in October 2012, all of which were Hyundai Verna models.
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