PRLog (Press Release) – Apr 09, 2011 – An economic recovery is under way in Bahrain, which is good news for the auto sector. Our economic outlook for Bahrain sees a steady improvement in real GDP growth rates over the coming years, driven by higher oil prices and investment in other sectors. While the rebounding economy is likely to drive growth of new vehicle sales, there is no getting around the limits of the size of the market. While Bahrain has one of the most open and stable economic systems in the Gulf, it is also the smallest country in the region with annual new car sales still falling short of 50,000 units. Furthermore, political risk will play a more important role going forward and could prove problematic for the security of long-term growth in the sector.
With its political landscape already tense, ongoing protests in Tunisia, Egypt and Yemen could inspire renewed unrest in Bahrain. As ever, frustration among the Shi'a community will be a key driver of any protests, with the royal family's response to events in Egypt seemingly highlighting its desire to protect the status quo. With political tensions elevated across the Middle East, Bahrain's government has announced a sharp increase in spending in an attempt to head off planned protests. The move may appease the immediate demands of those unhappy with the government and inspired by events elsewhere in the region. However, Bahrain still seems the most likely candidate in the Gulf to see some clear signs of politic ni ssan GTR specification al unrest over the coming months
In the auto sector, of note was Toyota Motor's ability to hold its market share, despite its global travails. Since the October 2010 recall, Toyota has been in difficulty globally again, with the Japanese company in January 2011 calling a mass recall on its Noah minivans, Avensis and Lexus range, totalling 1.7mn vehicles. Arabian Business reports that Bahrain's vehicles would not be asked to be recalled, a boost for the company's dealership in the country, Ebrahim K. Kanoo Group. However, with two global recalls within two years, Toyota's image worldwide has been somewhat tarnished.
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