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Saudi Arabia is expected to register the biggest fall in vehicle sales across the Middle East and North Africa (MENA) this year with a 25 percent decline, BMI Research, a Fitch Group company, said in a recent report.
Passenger car sales will drop 20 percent in 2017 amid higher unemployment rates and wage cuts, while commercial vehicles will likely see a 43 percent fall due to cutbacks in government spending on major projects.
Overall, the MENA region will be one of only two regions in the world to see negative growth in vehicle sales this year. Total car sales are expected to decline 1.7 percent due to market pressures across the GCC and a deteriorating sales outlook in Egypt.
“The GCC markets will underperform the rest of the region as we have revised down our forecast to a contraction of 16.3 percent. Sales continue to decline in all markets, although we still expect to see some improvement in the latter months of the year as purchases are brought forward before the implementation of VAT in 20 18,” BMI added.
In Qatar, which imports all of its new vehicles due to lack of domestic production, consumers are projected to hold off on major purchases due to market weakness and uncertainty in the state following the GCC blockade.
Elsewhere, Egyptian car sales are expected to drop 24.2 percent in the same period, amid forecasts for local currency depreciation to EGP 18.57/USD. This will keep vehicles unaffordable for the majority of consumers, the report said.
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