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Automotive Sector Investment Study

Navigator implemented a comprehensive market entry study on the automotive parc and demand for two key automotive components in the 6-nation Gulf Cooperation Council, comprising the United Arab Emirates, Saudi Arabia, Bahrain, Qatar, Oman and Kuwait.

The objective of the study was to determine the current competitive situation for supply and demand of parts, and the potential of investing in production in the UAE and Saudi Arabia. Each report numbers 155 pages, and is accompanied by a detailed Excel forecast model and photo annexes.

The study included the following elements:

  • Political and macroeconomic review of the 6 GCC countries
  • Detailed GDP growth forecasts for the UAE and Saudi Arabia, including a Base, Best and Worse Case scenarios
  • Detailed automotive parc estimates for 2006-2008, and growth forecasts to 2015, by automotive segment: passenger vehicles, SUVs, trucks, busses, other commercial vehicles. Three scenarios are provided for each forecast: Base, Best and Worse Case
  • Detailed automotive component estimates for 2008, and a growth forecast to 2015, for passenger vehicles and commercial vehicles, by case
  • A detailed assessment of the foreign investment laws and incentives available to foreign investors, including a review of main institutions such as the Saudi Arabian General Investment Authority (SAGIA); King Abdullah Economic City (KAEC); Jebel Ali Free Trade Zone (JAFZA); Ras-al-Khaimat Investment Authority (RAKIA); Abu Dhabi Economic City, etc.
  • An assessment of the likely financial and profit margin impact of the investment. This included financial benchmarking against leading international automotive components manufacturers, as well as a brief profit-loss model for production of two automotive parts.
  • Detailed profiles of the automotive sector for the 6 GCC countries, based on primary research in UAE and Saudi Arabia, as well as secondary research from a variety of sources: Business Monitor International (BMI); Economist Intelligence Unit (EIU); National Commercial Bank; Road Transport Authority; Department of Statistics and Planning; Abu Dhabi Chamber of Commerce & Industry; US Commercial Service; etc.
  • Assessment of technology trends in specific automotive components, developed through an exhaustive review of technical literature, product specifications, quality specifications and manufacturer information.
  • Analysis and retailer and distributor profit margins and mark-up, developed through a site interviews with over 50 garages, distributors, and other points of sale in Saudi Arabia and the UAE (Abu Dhabi, Dubai, Sharjah, Ras-al-Khaimat). Further interviews with leading distributors such as Juffali Company, General Automotive Services Company, Liberty Autos, Al Dobowi Group, Toyota, Chery, and others provided primary information on the auto sector, demand trends and pricing.

The commercial review was successful: Navigator is now supporting our client in implementing the investment for one automotive component in the GCC.

All information relating to the client, the specific investment project and its sponsors collected by NAVIGATOR Consulting Group Ltd. during this due diligence project  is strictly confidential and will not be released by NAVIGATOR Consulting Group Ltd. to any third parties. This information appears here as an indication of NAVIGATOR’s consultancy capabilities in this field.