MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET A KNOWLEDGE REPORT PREPARED FOR

Transcription

1 MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET A KNOWLEDGE REPORT PREPARED FOR

2 TABLE OF CONTENT 1 Spotlight on Middle East & Africa C O N T E N T 2 Current status of Middle East Market 3 Overview of Vehicle Fleet, Sales and Automotive Aftermarket 4 Vehicle Fleet Age Distribution 5 Middle East & Africa Vehicle Sales Overview 6 Middle East & Africa Automotive Aftermarket Overview 7 Market of New Automotive Technologies in Middle East & Africa 8 Market Attractiveness Index (Automotive Aftermarket) 9 Factors Impacting Sales of Vehicles 10 Trends & Developments 11 Dealer Survey Impact of VAT 2 MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET TechSci Research 2

3 SPOTLIGHT ON MIDDLE EAST & AFRICA MIDDLE EAST AFRICA TOTAL ESTIMATED VEHICLE FLEET 42 Million* TOTAL VEHICLE FLEET 50 Million* TOTAL ESTIMATED No. OF AFTERMARKET OUTLETS 50 Thousand** TOTAL No. OF AFTERMARKET OUTLETS 45 Thousand** VEHICLE SALES VOLUME, * Million Units VEHICLE SALE VOLUME, * Million Units AUTOMOTIVE AFTERMARKET SALES VALUE, 2017 $ 12**Billion AUTOMOTIVE AFTERMARKET SALES VALUE, 2017 $ 10** Billion SHARE OF VEHICLE SEGMENT, VOLUME SALES SHARE OF VEHICLE SEGMENT % SALES 11% PASSENGER VEHICLE 89% COMMERCIAL VEHICLE 2 7 PASSENGER VEHICLE COMMERCIAL VEHICLE SHARE OF AFTERMARKET PARTS, VALUE SALES SHARE OF VEHICLE SEGMENT % SALES Automotive Filters Brake System Parts 4% Engine Oil/Lubricant/Coolant 7% Batteries Electrical Parts/Lightning 2% Tyres 22% *Includes both passenger and commercial vehicle **Estimated figures Others 5 Middle East includes GCC countries, Iran, Israel, Yemen, Jordan, Lebanon Electrical Parts/Lightning 2% Others 53% Automotive Filters Brake System Parts 6% Engine Oil/Lubricant/Coolant 6% Source: OICA, Whitepapers, Articles, TechSci Estimates MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET TechSci Research 3 Batteries Tyres 23% 3

4 CURRENT STATUS OF MIDDLE EAST MARKET Middle East is witnessing a slowdown in its economy due to impact of lower oil prices C U R R E N T S TATand U S trying O F to Mmanage I D Dby L instituting E E A S T some M Asevere R Kmeasures E T and exploring ways to make their economies less oil-dependent. The decline in oil prices has resulted in the worst economic slowdown since the global financial crisis of The downturn in oil prices impacted many small and medium enterprises, along with larger corporations. Some of these corporates in vehicle fleet business had large contracts with oil related businesses. Timelines of these oil projects extended due to economic downturn. This made some of the vehicle fleet companies to extend lease terms because payments were not released and their was large payables owed by governmental entities. This forced fleets to keep vehicles in service longer, extending the vehicle s lifecycle costs. In addition, earlier stern steps taken by the government diminished consumer sentiments deferring automotive purchases. However, these strict steps have since been somewhat relaxed. One recent development that may spur future sales is that, for the first-time ever, women will be allowed to drive in Saudi Arabia starting in June MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET TechSci Research 4

5 OVERVIEW OF VEHICLE FLEET, SALES AND AUTOMOTIVE AFTERMARKET

6 MILLION UNIT AUTOMOTIVE AFTERMARKET IN $ BILLION MILLION UNIT AUTOMOTIVE AFTERMARKET IN $ BILLION MARKET ASSESSMENT OF VEHICLE FLEET, SALES AND AUTOMOTIVE AFTERMARKET Middle East Vehicle Fleet (in million units) New Vehicle Sales (in million units) Automotive Aftermarket (in billion USD) Africa Vehicle Fleet (in million units) Automotive Aftermarket (in billion USD) New Vehicle Sales (in million units) Source: OICA, Whitepapers, Articles, TechSci Estimates Middle east market is witnessing a slow growth pertaining to vehicle sales. GCC market is under tremendous pressure to regain the pace which it has lost in last 3 years. Iran and Israel are the only two countries which had given a boost tothe overall vehicle market. Automotive aftermarket growth is directly associated with vehicle fleet. With inclusion of new taxes and revised registration rates in GCC countries, vehicle owners are less interested in buying new vehicles and are focusing more on maintaining older vehicles which will eventually boost the automotive aftermarket in the long run Furthermore new automotive technologies & accessories like infotainment, telematics, dashcam etc. are in great demand which has further.enhanced the growth prospects. Africa is a huge market for used vehicles imported from different countries. Current infrastructure, usage pattern etc. have increased the pace of aftermarket growth in the country. 6 MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET TechSci Research 6

7 VEHICLE FLEET AGE DISTRIBUTION PA S S ENGER C A RS C O M M E RCIAL V E H I C L ES Less then 2 years 2 to 4 years Less then 2 years 2 to 4 years 4 to 8 years 8 to 15 years 4 to 8 years 8 to 15 years 100% 90% 6% 18% 100% 90% 12% 28% 80% 80% 70% 43% 70% 60% 39% 60% 48% 50% 50% 4 40% 40% 30% 20% 47% 37% 30% 20% 37% 10% 10% 2 0% 4% 6% 0% 3% 2% Middle East Africa Middle East Africa Source: Whitepapers, Articles, TechSci Estimates Passenger vehicle fleet in middle east is relatively young with more than half of the fleet under 4 years of vehicle age. Most of the older vehicles are either exported to Africa or are scrapped. Africa on the other hand is driven by some of the major countries like South Africa, Egypt etc. where new vehicle sales is on the rise but parallel import of used vehicles to some of the less developed countries have increased the average age of the vehicle in use. 7 MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET TechSci Research 7

8 MIDDLE EAST VEHICLE SALES OVERVIEW Vehicle Sales (in million units) PASSENGER VEHICLE Share by Vehicle Type 46% 44% 44% 42% 46% 46% 47% 2022F % 2 29% 28% 28% 28% % 18% 17% 17% % 8% 11% 10% 8% 8% 7% % 3% 3% 3% 3% 3% 4% F MPV Hatchback Pickup SUV Sedan COMMERCIAL VEHICLE Share by Vehicle Type % 83% 72% 81% 80% 79% 76% % 11% 7% 6% 6% 7% 11% 14% 16% 11% 11% 12% 14% 4% 3% 3% 3% 3% F Passenger Cars Light s Medium s Bus Heavy s While there has been drastic drop in sales of commercial vehicles across middle east, passenger vehicle sales increased due to demand in countries like Iran & Israel. Sales in GCC countries is largely affected due to sluggish economy, oil prices and regulatory & policy revisions. Source: OICA, Whitepapers, Articles, TechSci Estimates 8 MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET TechSci Research 8

9 AFRICA VEHICLE SALES OVERVIEW Vehicle Sales (in million units) PASSENGER VEHICLE 56% 54% 54% 52% 54% 56% 57% 2022F % 19% 1 16% 18% 18% 18% 21% % 13% 11% 11% 9% 8% 11% 10% 10% 10% 9% % 4% F Sedan SUV Pickup Hatchback MPV COMMERCIAL VEHICLE % 63% 61% 71% 70% 69% 66% % 16% 1 11% 11% 11% 13% % 1 16% 11% 12% 12% 14% 7% 6% 8% 7% 7% 8% 7% F Passenger Cars Light s Medium s Bus Heavy s The market figures continued to reflect subdued investment sentiment in the economy. Global economic pressure coupled with collapse in global commodity prices have slowed the growth in African continent. Source: OICA, Whitepapers, Articles, TechSci Estimates 9 MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET TechSci Research 9

10 MIDDLE EAST & AFRICA AUTOMOTIVE AFTERMARKET OVERVIEW

11 MARKET SHARE OF AFTERMARKET COMPONENTS IN MIDDLE EAST & AFRICA MIDDLE EAST AFRICA 2017 Automotive Filters Electrical Parts/Lightning 2% Brake System Parts 4% Engine Oil/Lubricant/Co olant Batteries 7% Others 5 Market Value $ 12 Billion Tyres 22% 2017 Automotive Filters Brake System Parts 6% Engine Oil/Lubricant/Coolant 6% Electrical Parts/Lightning 2% Others 53% Market Value $ 11 Billion Batteries Tyres 23% Middle east automotive aftermarket is forecasted to reach 16 Billion USD by This market will majorly be driven by existing vehicle parc coupled with improving vehicle sales. Africa automotive aftermarket is forecasted to reach 15 Billion USD by Increase in vehicle parc owing to new as well as used vehicle sales have improved the demand for aftermarket components and accessories 2022F 2022F Electrical Parts/Lightning 2% Automotive Filters Brake System Parts 4% Engine Oil/Lubricant/Coolant 7% Batteries 6% Others 56% Market Value $ 16 Billion Others Includes engine parts, maintenance parts, mechanical parts, accessories etc. Tyres 20% Automotive Filters Brake System Parts 6% Engine Oil/Lubricant/Coolant 6% Electrical Parts/Lightning 2% Batteries Others 5 Market Value $ 15 Billion Tyres 21% Source: OICA, Whitepapers, Articles, TechSci Estimates 11 MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET TechSci Research 11

12 MARKET PRICE OF AFTERMARKET COMPONENTS IN MIDDLE EAST & AFRICA MIDDLE EAST AFRICA Tire ASP in USD Tire ASP in USD Passenger Car Passenger Car Batteries ASP in USD Batteries ASP in USD Passenger Car Passenger Car Engine Oil/Lubricant ASP in USD Engine Oil/Lubricant ASP in USD Passenger Car Passenger Car Automotive Filter ASP in USD Automotive Filter ASP in USD Passenger Car Passenger Car 12 MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET TechSci Research 12

13 MARKET SIZE OF LATEST AUTOMOTIVE TECHNOLOGIES Middle East and Africa Dashboard Camera Market CAGR F By Value: 11.0 M A R K E T S I Z E O F L AT E S T A U T O M O T I V E T E C H N O L O G I E S E 2018F 2019F 2020F 2021F Value (USD Million) Middle East and Africa Connected Cars Market CAGR F By Value: 32% E 2018F 2019F 2020F 2021F V a l u e ( U S D B i l l i o n ) Source: TechSci Research According to TechSci research, the growing demand for safety and vehicle assist features specially in countries like Saudi Arabia where government have allowed women drivers is a point of inflection for connected cars market which is projected to grow at a CAGR of 32% and reach 3.74 billion USD by Automotive technologies such as telematics, advanced infotainment systems, ADAS etc. are increasingly becoming popular among masses. While some of basic features are available across most of the vehicles present in middle east, advanced technologies like ADAS is yet to penetrate in a big way. 13 MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET TechSci Research 13

14 CAGR ( F) MARKET ATTRACTIVENESS INDEX OF AFTERMARKET COMPONENTS IN MIDDLE EAST & AFRICA 12.00% M A R K E 10.00% T AT T R A C T I V E N E S S I N D E X O F A F T E R M A R K E T C O M P O N E N T S I N M I D D L E E A S T & A F R I C A 8.00% 6.00% Egypt Kenya Oman UAE Saudi Arabia Iran 4.00% Kuwait 2.00% Libya South Africa Israel 0.00% Low Medium High Note: The size of the bubble corresponds to the market size in 2017 Iran, Saudi Arabia, UAE and South Africa are top 4 markets which will continue to generate new demand for aftermarket auto components. While Iran and Israel are two of the countries with encouraging vehicle demand, Saudi & UAE though under tremendous market pressure will continue to generate the demand for auto component aftermarket. 14 MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET TechSci Research 14

15 FACTORS IMPACTING SALES OF VEHICLES Increase in Vehicle Registration/License Fess Countries like UAE are witnessing revision of vehicle licensing, license renewal fees etc.. This will significantly affect the decision of customers in buying a new or used vehicle. While new car license has gone done from Dh460 to Dh400, the second hand car carries an additional transfer ownership fee of Dh350 bumping up the overall fees to Dh750. Similarly vehicle testing and driver license fees has also gone up adding to the dismay of customers. FA C T O R S I M PA C T I N G S A L E S O F V E H I C L E S Revised Vehicle Licensing Fees (AED) Type of vehicle First time Renewal Transfer ownership Re-registering Licensing a light vehicle Licensing a vehicle that weighs 3 to 12 tons Licensing a vehicle that weighs more than 12 tonnes Licensing a light mechanical vehicle Licenisng a heavy mechnical vehicle 1, ,000 Licensing Trailers and semi-trailers Licensing a bus with passenger capacity Licensing a bus that exceeds 26 passenger capacity 1, ,200 Introduction of Value Added Taxes VAT of is imposed on new vehicle sales, fuel consumption and after sales services/parts as well. This has significantly impacted the demand of new cars in the region. The market sentiments are low but it is anticipated that as the market matures the taxes will be accepted. Regulation Allowing Saudi Women To Drive Saudi Arabia is the major market for passenger vehicles and half of the GCC vehicle market is captured by this country. With new regulation allowing Saudi women to drive vehicles is expected to boost vehicle sales and more importantly segments like hatchbacks will witness higher growth in comparison to previous years. It is also expected that demand for new vehicle technologies like telematics, advanced infotainment systems, autonomous vehicle etc. with enhanced safety features will be on a rise as women drivers will prefer to have these features in the vehicles they ll drive. 15 MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET TechSci Research 15

16 TRENDS & DEVELOPMENTS The outlook for future sales of vehicles in Middle East is positive. Anticipated stabilization of crude oil prices, implementation of favorable government initiatives, growing infrastructure construction and logistics industry will drive sales of trucks, buses, and vans in the region. In order to accommodate growing vehicle demand of the Kingdom, countries like Saudi Arabia plans to increase investments toward strengthening and expanding the country s road infrastructure. The Dubai Chamber of Commerce and Industry has formed the Automotive Manufacturers Business Group, which will be tasked with developing and advancing Dubai s automotive industry and provide a platform for industry stakeholders to collaborate. Rapid industrialisation and modernisation currently sweeping through many African countries has resulted in an increased demand for capital goods such as machinery, lubricants, spare parts, ball bearings and other mechanical goods and accessories. The market for automobile spare parts, in particular, has been an attractive sector for UAE-based enterprises, who have emerged as the leading supplier of these goods to many countries in East, Central and Southern Africa Saudi Arabia plan to develop an entertainment city with an investment of 64 Billion USD will pave the way for increased tourist movement as well as local transportation. It will increase demand for private as well as public transportation in the country. This is well backed up by introduction of tourist visa for other nationals from 1st April, 2018 onwards. 16 MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET TechSci Research 16

17 DEALERS SURVEY IMPACT OF VAT H O W D O Y O U F E E L A B O U T V AT I N C L U S I O N I N A U T O M O T I V E? Base: 30 Passenger Car Dealers D E A L E R S S U R V E Y I M PA C T O F VAT 0% 4 5 Post VAT inclusion of imposed on new vehicle sales, fuel consumption and after sales services/parts, TechSci had a small survey done with some of the dealers in GCC to understand their perception over this new regulation. Out of 60 dealers interviewed for both passenger and commercial vehicle segment none was found to be positive about VAT inclusion. More than half of the dealers showed negative sentiments. Base: 30 Dealers 0% 40% 60% 17 POSITIVE NEUTRAL NEGATIVE MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET TechSci Research 17

18 ABOUT TECHSCI RESEARCH TechSci Research is a global market research and consulting company with offices in the US, the UK and India. TechSci Research provides market research reports in a number of areas to organizations. The company uses innovative business models that focus on improving productivity, while ensuring creation of high-quality reports. The proprietary forecasting models use various analyses of both industry-specific and macroeconomic variables on a state-by-state basis to produce a unique bottom-up model of a country, regional and global industry prospects. Combined with the detailed analysis of company activity and industry trends, the result is a uniquely rich evaluation of the opportunities available in the market. TechSci Research North America 708 Third Avenue, Manhattan, New York, United States Tel: sales@techsciresearch.com TechSci Research Europe 54, Oldbrook, Bretton, Peterborough, United Kingdom sales@techsciresearch.com TechSci Research Asia-Pacific B 44, Sector 57, Noida, National Capital Region, U.P. India Tel: sales@techsciresearch.com Disclaimer The contents of this report are based on information generally available to the public from sources believed to be reliable. No representation is made that it is timely, accurate or complete. TechSci Research has taken due care and caution incompilation of data as this has been obtained from various sources including which itconsiders reliable and first hand. However, TechSci Research does not guarantee the accuracy, adequacy orcompleteness of any information and it is not responsible for any errors or omissions or for the results obtained from the use of such information and especially states that it has no financial liability whatsoever to the subscribers / users of this report. The information herein, together with all estimates and forecasts, can change without notice. All the figures provided in this document are indicative of relative market size and are strictly for client s internal consumption. Usage of the same for purpose other than internal will require prior approval of TechSci Research. ABOUT AMDU 2018 As the largest international automotive aftermarket trade show in the Middle East, Automechanika Dubai serves some of largest automotive markets such as Saudi Arabia and Iran. The show also acts as the central trading link for markets that are difficult to reach connecting the wider Middle East, Africa, Asia and key CIS countries. Now in its 16th edition, the exhibition offered trade professionals the chance to meet face-to-face 1,955 key exhibitors across the three day show held from 1-3 May The trade show is a good platform to find out more about the latest products and services, find new suppliers, source products and compare product alternatives.