Several multinational automobile component producers have shown interest in setting up their manufacturing base in Oman, either as a joint venture or as a wholly-owned subsidiary.
This follows a detailed study on investment opportunities in automotive sector in Oman, conducted by WS Atkins on behalf of Public Authority for Investment Promotion and Export Development (Paiped) and the subsequent discussion the government agencies had with overseas automobile parts manufacturers. This is expected to further strengthen the Sultanate's position in the automobile component industry.
The government allows 70 per cent foreign ownership in automobile component sector
Ahmed Hassan Al Dheeb, Undersecretary at the Ministry of Commerce and Industry, said that the government allows 70 per cent foreign ownership in automobile component sector (like any other industries), which can even go to 100 per cent in special cases.
"If the company is a joint venture, it will be treated as an Omani company. It can get all incentives available for local firms,-? he added, on the sidelines of a seminar on investment opportunities in the automotive sector organized by Paiped.
Tyres, spark plugs, filters, lubricants, fuel pumps, side mirrors, clutch parts, fans, brake pads, car care products and ball bearings are in demand
Highlighting the findings of a study on investment opportunities in the automobile sector at the seminar, John Barber, Director of WS Atkins, said eleven auto components have been identified as potential sectors for manufacturing in Oman, after a detailed evaluation. These are tyres, spark plugs, filters, lubricants, fuel pumps, side mirrors, clutch parts, fans, brake pads, car care products and ball bearings.
Barber said that Oman is an immature market as far as automobile component industry is concerned, although companies like Reem Batteries are exporting to several countries.
"Most of the manufacturing firms have joint venture agreements with multinational companies,-? add Barber. Dunes Oman has a tie-up with Brakes India, while ABI Precision has an affiliation with TVS India.
Oman's auto market is expanding rapidly and in 2010, there were 804,233 cars registered and this is increasing by approximately 7.5 per cent per annum
Oman's auto market is expanding rapidly and in 2010, there were 804,233 cars registered and this is increasing by approximately 7.5 per cent per annum indicating that the number of cars in the Sultanate will reach over 1.6 million by 2020. This will lead to a significant increase in demand for automotive parts and the opportunity for local manufacturers to capture this market.
WS Atkins's three stage process for identifying these components was based on an assessment of the demand for and supply of automotive parts in relation to the value of domestic imports and exports, regional imports to the GCC, value of global trade and global foreign direct investment.
The WS Atkins study also identified 19 countries for exporting products and attracting foreign investment. These include the UAE, Germany, the Netherlands, North African countries and Bangladesh.
Times of Oman