Market Report, "Algeria Autos Report Q4 2014", published

Algerian new vehicle sales were down by 28% over H114, at just 180,277 units, according to figures cited by the local French language Motors Magazine. On current sales trends, this would imply a full-year sales figure around BMI's current forecast of 359,179 units. As such, we maintain our sales forecast this quarter, but would caution that downside risks remain, which we outline below.

One main reason behind the calamitous drop in sales is the fact that many Algerians have been looking to rent or buy houses via a national homebuilding scheme being carried out by the Housing Development and Improvement Agency (AADL) which has therefore accounted for most of their disposable income in 2014. Other factors weighing on the near-term outlook for automobile sales in Algeria include: rising congestion in major cities, a lack of parking spaces and the rising costs of owning and running a vehicle.

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Looking at wider economic trends, BMI's Country Risk team retains a 2014 GDP growth forecast of 3.2% this quarter and also retains its view that it does not expect the hydrocarbon sector, which accounts for a third of economic output and nearly all exports, to return to growth this year. The performance of the industrial sector (4.7% of GDP) is also likely to be mixed over the coming quarters, after estimated real growth of 4.5% in 2013. Most of the manufacturing sub-indices contracted, with only agribusiness recording significant growth. That said, Renault's new Oued Tielat factory is scheduled to start production in November and this should provide a boost to the manufacturing sector from 2015 onward. In June 2014, the Algeria Press Service reported that initial prototypes of the Symbol were set to be produced at the factory by month-end. These cars were then to be sent for extensive testing (40,000km) at Renault's facilities in Romania.

Beyond 2014, there are reasons to expect something of a recovery in new vehicle sales. For one, we expect private consumption - a key...

The Algeria Autos Report features the latest data and forecasts covering production, sales, imports and exports.

Business Monitor International (BMI)'s Algeria Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the automotives market in Algeria.

Key Benefits

* Benchmark BMI's independent automotives industry forecasts on Algeria to test other views - a key input for successful budgetary and planning in the Algerian automotives market.
* Target business opportunities and risks in the Algerian automotives sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Algeria.

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