"Kuwait Autos Report Q1 2014" is now available at Fast Market Research

From: Fast Market Research, Inc.
Published: Fri Jan 17 2014


BMI believes that Kuwait continues to represent one of the more attractive autos markets of the Gulf region as we enter 2014, with good positive growth potential in both the volume and high-end segments. In H113, new car sales were reportedly up by 8%. This bodes well for BMI's forecasts for total new vehicle sales to rise by 9.1% over the full year, so we have left our forecasts unchanged this quarter. Looking forward, we believe that strong annual growth (in the order of 8-10%) can continue over the remainder of our forecast period to 2017.

Continuing to support our upbeat stance towards Kuwaiti auto sales is a positive economic backdrop. For 2014, BMI recently revised up its GDP growth target to 2.9% (from 2.6% previously). We now believe that Kuwait's economy should continue to grow at a modest pace throughout the coming quarters, helped by a mild projected rise in oil production and strong domestic demand. We remain cautious on the country's investment outlook; although we note that robust growth in construction loans in recent months and the prospect of a mild increase in government capital expenditure this fiscal year provide encouraging signs for gross fixed capital formation (GCFC), with BMI targeting 5% growth for fixed investment across 2014. This could help lend support to demand for commercial vehicles within the country.

Full Report Details at
- http://www.fastmr.com/prod/759099_kuwait_autos_report_q1_2014.aspx?afid=303

Moreover, the outlook for private consumption - a key indicator of likely demand for new passenger vehicles - continues to be broadly positive, with BMI forecasting growth of 3.0% in 2014. Fiscal policy will remain expansionary, although we expect a deceleration in current expenditure growth following the 25% hike in public sector salaries in March 2012. The interest rate environment also remains broadly favourable for those Kuwaitis needing to finance new car purchases via loans. The Central Bank of Kuwait has kept the key discount rate at 2% since October 2012, with inflation set to remain relatively subdued, at an annual average rate of 3.5% in 2014, according to BMI forecasts. Consumer credit is still the main driver of the overall expansion in lending, with personal credit (excluding purchases of securities growing by an average of 17.6% year-on-year (y-o-y) over the first eight months of 2013. The recent strengthening state of the real estate market should also provide another boost to private consumption. The value of real estate sales rose by an average of 26.6% y-o-y over 8M13, according to data from the National Bank of Kuwait. BMI retains the view that Kuwaiti banks should see stronger lending activity than in the last few years, and will be able to benefit from solid household expenditure and the ongoing expansion of non-oil economic activity.

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