Rabat – If the Gulf countries have stronger markets in the automotive sector, Morocco remains the champion of North Africa.
In a new study, BMI Research, a Fitch Group Company, points out that Morocco exceeds the regional average in terms of the risk/reward ratio for auto sales. The risk to the sector, however, is higher compared to the regional average.
According to the firm, “GCC markets dominate the top 10 of MENA Sales, boosted by high scores for good market size, relative stability, strong spending power and lack of taxes.” The firm explains that these results “contrasts with North Africa, which is largely let down on the risk side, even for the region’s strongest performer, Morocco.”
Despite the positive figures, the Middle East and North Africa (MENA) region is near the bottom of BMI’s new Autos Sales Risk/Reward Index with a regional average score of 46.4. According to the firm, “this ranks ahead of only Sub-Saharan Africa which scores just 28.5 out of 100, but is only marginally behind the Americas on 46.5.” The lower score comes mostly from the ‘risk’ side, with several countries scoring far below the regional average due to high levels of political risk, which in some cases has resulted in conflict.
BIM Research explains how “more positive regional average scores are awarded for market size and GDP per capita, which both measure sales potential on the ‘reward’ side.” The opening up of Iran, following the removal of sanctions, will increase regional sales volumes in particular.
In a global context, only one MENA market appears in the top 30. The United Arab Emirates (UAE) ranks 29 with a good market size and a highly-urbanized population boosting its rewards. The UAE (29), Qatar (38) and Saudi Arabia (44) are the only MENA markets in the global top 50.
According to the firm, all of the North African markets appear in the bottom half of the regional table. “Although Morocco (51.4) and Tunisia (47.1) score higher than the regional average (45.4) for their rewards, underlining our view of Morocco as a regional outperformer for sales growth, they both score below the MENA average for risk,” concludes the Fitch Group.
The combined North African markets score an average 35.0 for risk, far below the MENA average of 48.7.
