Kuwait Autos Report Q1 2013

Kuwait has continued to experience strong growth in vehicle sales over 2012, with new vehicle sales up
by a reported 27% year-on-year (y-o-y) during the month of September, to reach 12,290 units. This brings
the year-to-date total to 102,944 units, up by 25% y-o-y.
Given this strong performance over the 9M12 period, BMI believes the time is right to make an upwards
revision to our current 2012 new vehicle sales forecast. We now believe that a 25% expansion in new
vehicle sales is likely, up from 10% previously.
One of the key factors driving demand for new cars in Kuwait at the present time has been a booming
vehicle leasing market. In this context, in October 2012, Bahrain-based Investcorp acquired a 35% stake
in Kuwaiti vehicle leasing and rental specialist Automak Automotive. Investcorp’s view that private car
ownership will wane, in favour of leasing or renting, falls in line with BMI’s forecast for annual growth in
the country’s car density to slow from 4-5% in 2006 and 2007, when new car sales growth was round 8%,
to a more subdued 2% by the end of our forecast period in 2017.
In Kuwait, Investcorp expects growth to come from the expansion of the oil sector and growing
government expenditure, which not only encourages business spending on fleets, but also brings
expatriate workers, who may not want the commitment of owning their own vehicle. Similar dynamics in
other Gulf Cooperation Council states, including increased government spending to ease public unrest,
mean that the two companies are also looking to the wider MENA region for growth.
Investcorp’s Gulf Business division president, Mohammed Al Shroogi, says Automak is ‘well positioned
to grow locally and regionally’. It is one of the leading leasing and rental firms in Kuwait, with a reported
market share of 15% and a fleet of more than 4,500 vehicles. Expansion of such a company can still have
benefits for the new car market, however, as leasing and rental fleets will need to be expanded and
renewed in line with segment growth. This is one factor in our forecast for reasonably stable growth in car
sales in Kuwait over our forecast period to 2017.
Certainly, BMI remains upbeat on the outlook for the Kuwaiti auto sector as we enter 2013, 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%. Against this easing inflation backdrop, in October 2012 the Central Bank of Kuwait
(CBK) cut the benchmark interest rate to 2%, from 2.5%. With low interest rates reigning around the
world, the CBK is likely to maintain a dovish outlook for some time. This gives scope for car loans to be
cut further and certainly allows for them to remain attractively priced over the short to medium term.

Kuwait Autos Report Q1 2013

Executive Summary ........... 5
SWOT Analysis ..... 6
Kuwait Autos Sector SWOT ........... 6
Kuwait Political SWOT Analysis ... 7
Kuwait Economic SWOT Analysis . 8
Kuwait Business Environment SWOT Analysis .......... 9
Global Overview . 10
UK Boosts Europe, But Favourites Still Outperform .... 10
Table: Passenger Car Sales 8M12 ............. 10
Incentive Boom For Japan, US Powers On ..... 11
Industry Risk/Reward Ratings ...... 15
GCC States Still Dominant . 15
Table: Middle East And North Africa Autos Risk/Reward Ratings ...... 17
Regional Overview ........... 18
Macroeconomic Forecast Scenario ............ 20
Table: Kuwait - Economic Activity, 2011-2016 ....... 22
Industry Forecast Scenario ........... 23
Sales........ 23
Table: Kuwaiti Autos Sales, 2010-2017 ..... 23
Competitive Landscape ... 25
Cars ... 25
Table: Kuwait - Top 10 Best-Selling Models 2011 .. 26
Commercial Vehicles ..... 28
Suppliers .......... 29
Luxury Cars ..... 29
Leasing ............ 31
Company Monitor ............. 32
Company Profiles ............. 34
Arabian Motors Group .. 34
Kuwait Automotive Imports ......... 35
Alghanim Automotive ..... 36
Demographic Outlook ...... 37
Table: Kuwait's Population By Age Group, 1990-2020 ('000) ............. 38
Table: Kuwait's Population By Age Group, 1990-2020 (% of total) .... 39
Table: Kuwait's Key Population Ratios, 1990-2020 40
Table: Kuwait's Rural And Urban Population, 1990-2020 .... 40
BMI Methodology ............. 41
How We Generate Our Industry Forecasts 41
Automobile Industry ....... 41
Sources ............ 42Table: Passenger Car Sales 8M12
Table: Middle East And North Africa Autos Risk/Reward Ratings
Table: Kuwait - Economic Activity, 2011-2016
Table: Kuwaiti Autos Sales, 2010-2017
Table: Kuwait - Top 10 Best-Selling Models 2011
Table: Kuwait's Population By Age Group, 1990-2020 ('000)
Table: Kuwait's Population By Age Group, 1990-2020 (% of total)
Table: Kuwait's Key Population Ratios, 1990-2020
Table: Kuwait's Rural And Urban Population, 1990-2020

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