PRLog (Press Release) – Apr 16, 2011 – Kuwait's auto market is likely to grow at a predictable and stable rate through the course of 2011. Recent BMI figures show overall annual car sales surpassing those of 2008, the year before the financial crisis began. Under current projections, year-on-year (y-o-y) growth for 2011 will be just over 3.5%, which sho first drive audi a6 uld mirror the state of the economy as a whole. BMI projections also see a 0.54% growth in the re-export sector over the course of 2011, down from 5.4% in android application 2010. This can be partially attributed to the slowdown of Government liquidity being generated around the world, but may also be part of a re-alignment of local import practices.
Inflation in the Kuwaiti economy has been a worry of late. A recent IMF study estimates that inflation will average 3.6% over 2011. With the price of oil rising due to political uncertainties in the Middle East and North Africa, Kuwait's oil based export economy has a current account with a healthy surplus. However, despite our relatively bullish outlook for growth, constant tensions on the political arena automobile news could pose significant threats to Kuwait's economic outlook. Despite being the one Gulf Cooperation Council (GCC) state with a functioning parliament, Kuwait scores relatively low in our short-term political risk ratings (73.1 out of 100), which may continue to deter investors away from its assets. Indeed, Kuwait's Prime Minister Sheikh Nasser Mohammed al-Sabah narrowly survived a confidence vote at the beginning of 2011 (the second in just one year), supported by only 25 out of 50 MPs, while 22 voted against him. Subsequently, with the government expecting GFCF to be among the major drivers of economic growth over the coming years, the investment outlook could deteriorate, should the political situation not stabilize.
Meanwhile, the Kuwaiti dealer for Japan's Lexus, Mohamed Naser Al Sayer & Son, has launched a new 'Seven-star Lexus centre' in Shuwaikh, Kuwait. The new impressively designed car dealer centre on Canada Dry Street hopes to boost the company's sale of Lexus units in the country. In general, Kuwait has fallen well behind other Gulf states in terms of auto sales growth in recent years owing to the structure of the economy. A lack of diversification has prevented the kind of consumer boom seen in the UAE, Oman, Bahrain, and Qatar, with stagnation in the retail sector. For Japanese and European carmakers, there is still room for growth. A lack of data from auto majors makes it hard to track trends, although there are indications that the SUV segment is growing, while the luxury segment is contracting. Luxury car sales are set to fall 5% over the next five years in sharp contrast to other Gulf states where the segment is forecast to keep growing.
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