Market Report, "Kuwait Autos Report Q4 2015", published

There are growing downside risks to BMI's forecast of 5% sales growth for the Kuwaiti new vehicle sales market in 2015. For one, we expect economic growth to head broadly lower over the coming years, primarily on the back of weaker oil prices and minimal growth in the oil sector. Secondly, we are expecting an increase in Kuwaiti interest rates before year-end.

Turning first to the economic backdrop, BMI's Country Risk team now expects economic growth in Kuwait to head broadly lower over the coming years, primarily on the back of weaker oil prices and minimal growth in the oil sector. Lower oil prices will only have a marginal detrimental impact on government spending as Kuwait has some of the largest buffers to lower oil prices, with fiscal breakeven prices at around USD50/bbl. Indeed, the government's five year development plan (2015-2020) will mitigate some of the impact of a slowing oil sector. Overall, we retain our forecast for real GDP growth of 2.6% and 2.4% in 2015 and 2016 respectively, down from an estimated 2.7% in 2014.

Full Report Details at
- http://www.fastmr.com/prod/1047951_kuwait_autos_report_q4_2015.aspx?afid=301

More depressingly for the passenger car/sport utility vehicle segments, we now believe that private consumption will act as a drag on real GDP growth over the coming years. First, consumer confidence indicators (which are collected only sporadically) have shown that sentiment is at its lowest levels since 2009, which we attribute to lower oil prices. Indeed, cutbacks in subsidies and the absence of plans to increase public sector employment levels point to dampened consumer demand. Loans to the private sector and point-of-sale transactions also point to a slowdown in household consumption. We expect these trends to continue over the coming quarters and forecast private expenditure growth of 2.5% in 2015, from 3.0% in 2014. On a more positive note, real estate valuations continue to head higher, boding well for a positive wealth effect.

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

BMI Research's Kuwait 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 Kuwait.

Key Benefits

* Benchmark BMI's independent automotives industry forecasts on Kuwait to test other views - a key input for successful budgetary and planning in the Kuwaiti automotives market.
* Target business opportunities and risks in the Kuwaiti automotives sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Kuwait.
* Assess the activities and market position of your competitors, partners and clients via our Competitive Landscape Analysis.

Coverage

BMI Industry View

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