Boston, MA -- (SBWIRE) -- 11/20/2014 -- New car sales have seen impressive growth in Saudi Arabia year-to-date, rising by a reported 12% over H114, to 408,073 units. June was a particularly strong month, with sales rising by 19% year-on-year (y-o-y). BMI believes this performance was bolstered in part by seasonal promotions.

On current trends, full-year sales would be just above the 815,000 unit mark. As such, BMI retains its forecast of 5.4% growth in new car sales this quarter. The country's macroeconomic backdrop remains broadly favourable, with BMI's Country Risk team forecasting real GDP growth of 4.3% in 2014 and having now revised up its growth forecast for 2015 to 3.6% (from 3.3%) on the back of an increasingly positive outlook for construction activity. Indeed, we see Saudi Arabia's economic performance remaining strong heading into 2015, owing to elevated domestic demand and accelerating progress on the country's substantial pipeline of infrastructure projects.

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Turning to private consumption - a key indicator of likely demand for new vehicles - BMI retains a bullish view this quarter, forecasting growth of 5% for both 2014 and 2015. Strong levels of private consumption should also lend support to demand for new cars. Auto financing should also remain fairly affordable, with monetary policy conditions set to remain supportive. Saudi consumer price inflation (CPI) averaged 2.8% year-on-year (y-o-y) in Q114, down from 3.9% in Q113. BMI has now revised down its expectations for 2014 average CPI to 3.4%, from 4% previously. As such, we expect no change to the Saudi Arabian Monetary Agency's key policy rates over the coming quarters, with the repo and reverse repo set to stay at their current levels of 2.0% and 0.25% respectively. This will help any Saudi residents who require financing in order to purchase a new vehicle.

Overall, we believe that confidence in the Saudi auto sector remains strong - with both a growing passenger car market, partially helped by a growth in benefits from the...

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

Business Monitor International (BMI)'s Saudi Arabia 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 Saudi Arabia.

Key Benefits

- Benchmark BMI's independent automotives industry forecasts on Saudi Arabia to test other views - a key input for successful budgetary and planning in the Saudi automotives market.

- Target business opportunities and risks in the Saudi automotives sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Saudi Arabia.

- Assess the activities and market position of your competitors, partners and clients via our Competitive Landscape Analysis.

Coverage

BMI Industry View

Summary of BMI's key industry forecasts and views, covering production, sales and the introduction of new technology or products.

Global, Regional and Country Industry Overviews

In-depth analysis of the major global and regional developments in the market, which can be linked with the country industry overview, providing cross-country investment, product and financing trends that will affect each market, supported by BMI?s global and regional industry forecasts.

Business Environment Rankings

BMI's proprietary Autos Business Environment Rankings are a unique country-comparative Risk-Reward Rankings index that separately analyses the risks and rewards of operating in each market. It is aimed at investors (including manufacturers, suppliers and dealers) who seek to either identify and compare market opportunities, or evaluate country-specific operational challenges.

The rankings methodology makes sophisticated use of over 40 industries, economic and demographic data points.

BMI Industry Forecasts

Historic data series and forecasts to end-2018 for all key industry indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast, including:

Total production value (US$bn); total production of units; production by vehicle-type (including cars, commercial vehicles, trucks and buses); total sales value (US$bn); sales by vehicle-type, including passenger cars and commercial vehicles (vans and microbuses, pickups, trucks and buses, 4 wheel drive); total exports by value (US$bn) and by units; total imports by value (US$bn) and by units; contribution to GDP; employment in industry.

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