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An Isuzu commercial vehicle

An Isuzu commercial vehicle



Motor City upbeat on commercial units

Its optimism stems from projects in the pipeline and ones awarded and due to start in 2015

January 2015

The commercial vehicles segment in Bahrain has had a rough ride over the past two years, but signs are that the New Year will see strong growth with a revival in some projects, a senior official of Motor City has said.

Expectations of the commercial market picking up come as the company prepares to open its multi-million-dollar Spareparts Warehouse and Distribution Centre in Mameer in front of the existing Centralised Service Centre in Q1 2015 and is investing in after-sales infrastructure with the revamping of its Mameer service centre.

“We see projects in the pipeline. There has been reclamation work in Muharraq, and a social housing project worth close to BD50 million ($132.6 million) is to be carried out near the Alba roundabout,” said Dr Bijan Majidi, general manager.

“Some projects that have already been awarded are expected to start in 2015,” he added.

Dr Majidi said there was a recovery in Bahrain in the general automobile market in 2014 but that the commercial vehicles sector remained sluggish as some of the projects failed to materialise.

Giving a rundown of the market over the past few years, he said the automobile sector had a marginal drop of 2 per cent in 2013 but that the slide in the heavy commercial segment was deeper – 5 to 6 per cent. One reason was that 2013 followed a very strong 2012 that had registered 44 per cent growth – a development that was not surprising as the previous year was marked by uncertainty. By November of 2014, the overall vehicles market grew around 7 per cent and we expect 2014 to close at 4 to 5 per cent growth. The good news is there was growth in 2014. However, the commercial segment was down by 3 per cent.”

Dr Majidi forecasts commercial vehicles would see growth of 5 to 6 per cent in 2015, marking a turnaround for the segment. “Commercial had not been receiving the oxygen required for the jump. The oxygen comes when you have infrastructure development,” he remarked, acknowledging that the impetus would come in 2015.

Hyundai construction equipment

Hyundai construction equipment

In 2014, the expected main infrastructure projects did not materialise due to varied reasons but continuous growth in the housing segment retained the commercial market without a drastic drop. “There has been some reclamation work in 2014 but reclamation is one type of work. Out of an artificial island you have to make a city and that’s a different story. There has to be buildings, hotels, healthcare facilities and other infrastructure,” he said, adding that the New Year would see the beginning of just that kind of activity.

Bahrain being a small market, it depends on building and development, unlike Saudi Arabia where the sheer size and population growth could boost demand for vehicles. For its small area, Bahrain is a very competitive market with many players, so capturing new customers is always a difficult part, he explained.

Dr Majidi and G Arunkumaar, senior sales manager, commercial division, said Motor City withstood the challenges and maintained or expanded sales levels. “In 2014 we increased sales of Isuzu light duty vehicles by 6 per cent compared with the previous year. Hino sales were up 4 per cent while we have retained our market share for Hyundai. We’ve been leaders for the last seven years in earthmoving equipment where we enjoy a 38 per cent share in the excavator and wheel loader segment, while in forklifts we’re second to Toyota with market share close to 25 per cent.

“In 2014 heavy construction equipment declined by more than 20 per cent; still, we have a big part of the cake and we maintained our sales levels and the number one position despite the market drop.”

The slide in the industrial equipment and applications market was also influenced to a certain extent by Tamkeen’s decision to suspend support for its programmes from March to October.

Motor City has customarily done well in light duty trucks mainly because they operate in the food and beverage sector. “It’s a growth industry for everyone, and we increased our market share dramatically,” said Arunkumaar.  “The light trucks market climbed 15 to 16 per cent and Motor City had growth approximating that level,” he added.

Sales in Bahrain’s commercial market were around 5,500 units in 2014 with Motor City claiming a fifth of the market. Approximately 50 per cent of its sales came from light commercial vehicles and light duty trucks. The company, meanwhile, has announced it will offer a more attractive sales and service package in line with its focus on providing the “best cost of ownership” by helping reduce the cost of operating vehicles once they have been purchased.




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