- Airports: 8 international; 85 total (public and private)
- Major commercial ports: 15
- Dry ports: 6
- Road network:74,820 km
- Rail network: 5,063 km
- Waterway network: 3,500 km
As the Middle East and Africa continues their journeys towards democracy and transparency, GB Auto believes that the region’s economic fundamentals will continue to support growing demand in the decade ahead. Political freedoms and the rooting out of corruption will lead to greater economic stability and a healthier investment environment. These positive changes, coupled with rising per-capita income, increasing availability of consumer finance in highly underleveraged markets and lingering pent-up demand for automotive products in under-motorized markets will support the industry’s growth in Egypt, Iraq and the African continent.
The years since the events of 25 January 2011 and the days that followed have not been easy for the Egyptian economy, but the country’s automotive market has proven quite resilient, and GB Auto has continued to perform.
Below are some key factors that the group believes underscore the Egyptian automotive market’s long-term durability:
Region-wide, political uncertainty and rising global commodities prices will somewhat dampen growth. That said, real GDP growth in the MENA region is expected to be above 4%, outperforming most of the world’s other markets.
The MENA region is strategically located at the juncture of several key waterways and overland transport routes, providing the region’s businesses with short lead times on importing and exporting key goods.
The Middle East is home to one of the youngest and fastest growing populations in the world, providing a built-in consumer base.
Despite significant discrepancies in GDP per capita across the region, sustained and sustainable growth has led to a rapidly growing middle class throughout MENA.
Statistics show that the average global motorization index is 100 cars per 1,000 persons, with that number in the MENA region being much lower on average. Management foresees the local index tripling in the coming years, given population and economic growth trends.
In this traditionally cash-based culture, auto loans and microfinance are becoming more prevalent, with both lenders and borrowers growing more comfortable with the practice.
Across Sub-Saharan Africa, GDP growth is expected to remain strong in the near term, at above 5% on average, according to the International Monetary Fund’s October 2012 World Economic Outlook, with growth in oil exporters even higher, at near 6%.
Africa’s economy is supported by the growth of its exports; between 1998 and 2006, the continent saw a 402% increase in exports to the United States, a 139% increase in exports to China. The diversity of exports is also key: the trend is towards value-added goods, which brings more of a return to the continent than the pure commodities plays experienced in the preceding decades.
Like the Middle East, Africa is home to one of the youngest and fastest growing populations in the world, with an approximate consumer base of 1 billion people. Likewise, the continent is expected to boast the world’s largest workforce by the year 2040.
The statistics of the growth of the middle class vary country-to-country, but on average, investments in education, infrastructure and key reforms are boosting growth of a large and increasingly powerful middle class across Sub-Saharan Africa.
Like the MENA region, Africa is on average quite under-motorized. Management foresees the local index tripling in the coming years, given population and economic growth trends.
In the traditionally cash-based economies of Sub-Saharan Africa, auto loans and microfinance are becoming more prevalent, with both lenders and borrowers growing more comfortable with the practice.