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BMI expects new vehicle sales in Gabon to post impressive 17% year-on-year (y-o-y) growth in 2012, after estimated 25% y-o-y growth in 2011. An immediate boost to the new vehicle market will come from increased government expenditure in the country. In October 2011, the Director General of Economy, Hamidou Okabe, revealed that the governments budget in 2012 is likely to increase to CFA2,453.1bn (US$5bn), compared with CFA2,370.8bn in 2011. We believe an enlarged budget will lead to a resumption in government purchases of vehicles for official use, which has been one of the key growth drivers in the past.
In the medium term, however, we expect growth to be more broad-based. After coming to power in 2009, President Ali Bongo Odimba announced the Emerging Gabon diversification strategy, which emphasised development in services, industry and the environment. To some extent, this will bolster demand for commercial vehicles in the country. The segment will also have benefitted from the construction and infrastructure activities related to Gabons hosting of the Africa Cup of Nations football tournament (Coupe dAfrique des Nations - CAN 2012) and 50 years of independence. However, we expect the contribution from the private household sector to total new vehicles sales to be rather low. While affordability is clearly an issue, the presence of a highly competitive used car market and the existing structure of tariffs on imported vehicles pulls private demand away from new vehicles. Local news sources have reported that the price differential between a brand new and a nearly new vehicle is quite significant, prompting consumers to opt for used cars.
Taking all of these factors into account, we expect growth averaging at least 9% y-o-y between 2012 and 2016. At this rate, the new vehicle market in Gabon will reach close to 8,000 units by 2016, more than double the level seen in 2010. The competitive landscape is largely dominated by Japanese brands which together occupy almost 80% of the market. The latest data from the Union of Automotive Industry Representatives (Urai) show that Toyota Motor alone cornered nearly 35% of the market during the first nine months of 2011, with sales of 1,503 units. Mitsubishi Motors (with sales of 842 vehicles), Mazda Motor (with 311 units) and Nissan Motor (265 units) were among the five most popular carmakers in the market during the nine-month period.
Competition is tight, particularly among the smaller players. Following their launches almost three years ago, the South Korean brands Hyundai Motor and Kia Motors have been able to corner almost 10% of the market. In 9M11, Hyundai was the third most popular carmaker with sales of 398 units.
Click for Report details:Gabon Autos Report Q2 2012