Surging Post-War Iraqi Market for Car Imports
WALTHAM, Massachusetts and LONDON, November 13 --
Global Insight Analysis Suggests Post-War Surge to 300,000 Units for Light Vehicle Imports to Iraq
Global Insight, Inc., a private company formed to bring together the two most respected economic and financial information companies in the world, DRI and WEFA, today announced its forecast findings on the newly-emerging Iraq light vehicle market. According to the Global Insight study, basic light vehicle demand during 2005-2007 should stabilise at estimated 200,000 units, after an immediate post-war surge to 250,000-300,000 units.
Since the end of the Iraqi war, used car exports to Iraq have risen very sharply, trending towards the lowest priced cars available from the neighbouring regions of the UAE, Kuwait and Jordan. This rise in demand has tightened used car markets substantially in the Middle East region, with dealers in the UAE reporting a 20% rise in prices. Between May and September of this year, it is estimated that 100,000 used cars have been shipped to Iraq, with Kuwait alone reportedly shipping 18,000 used cars to Iraq during this same period.
According to the study, the basic economic reform programme currently underway in Iraq will include price and trade liberalisation, privatisation, and the core macro economic goals of balancing the budget, keeping a stable currency and guaranteeing the rule of law. While this is similar in pattern to the Eastern European transition states, the current Iraqi transformation will differ significantly due to Iraq's more volatile and uncertain security environment and the wider degree of private ownership and control. In the case of Iraq, the shift to a free market economy is likely to be faster, first because it will be subject more directly to America's pro free trade influence, and second, because the weakness of the current Iraqi state apparatus will make it harder to implement a gradual, controlled series of reforms. Iraqi automobile demand will be directly affected by these changes, augmented by virtually free fuel with the official controlled price of standard petrol around US$0.01 per litre in Iraq.
Oil wealth, a free trade environment, external spending and financial support all augur for an Iraq potentially wealthier than some of its neighbours. Global Insight's macro economic forecast shows GDP rising from US$1,000 per capita in 2003 to close to US$3,000 by 2009. The new car market will be seen to grow as the Iraqi economy makes these gains. However, the investment in car dealerships will likely be in Jordan, Kuwait and in the UAE, at least until the security issues are resolved.
Global Insight's Middle East and Africa Automotive Industry Forecast Report provides commentary and analysis on macroeconomic developments, vehicle segmentation trends, brand competitive prospects, production trends and outlook and legislative trends. The current report covers the period from 2000-08 with a spot forecast for 2013, with a special section on the Iraq market. Countries covered include Saudi Arabia, Bahrain, Oman, Qatar, Kuwait, United Arab Emirates, Iran, Israel, Egypt, South Africa, and Morocco. Further information and selected excerpts from this report will be available at: www.globalinsight.com/AutosIraq.
About Global Insight
Global Insight, Inc. ( http://www.globalinsight.com/ ) is a privately held company formed to bring together the two most respected economic and financial information companies in the world, DRI and WEFA. Global Insight provides the most comprehensive economic and financial coverage of countries, regions, industries and markets available, using a unique combination of expertise, models, data and software within a common analytical framework to support planning and decision-making. With its April 2003 acquisition of World Markets Research Centre, Global Insight also provides the world's first same-day analysis and risk assessment service covering 185 countries and four industries, providing insightful analysis of market conditions and key events around the world. The company has over 3,300 clients in industry, finance and government with revenues in excess of US$70 million, over 600 employees and 23 offices in 12 countries covering North and South America, Europe, Africa, the Middle East and Asia.