Tunisia: CITY CARS’ profit up 16.8% in 2025, dividend

Tunisia's automotive distribution sector showed resilience in 2025 as CITY CARS, the country's leading vehicle distributor, reported a 16.8% year-on-year profit increase while maintaining shareholder dividend payouts at TND 1.250 per share. The performance reflects both domestic demand recovery and the company's operational efficiency gains amid volatile regional market conditions.

## What drove CITY CARS' 16.8% profit growth in 2025?

The earnings expansion stems from three interconnected factors: renewed consumer purchasing power following Tunisia's improved macroeconomic trajectory, increased vehicle imports through enhanced port logistics, and margin expansion from higher-margin vehicle variants in the sales mix. The Central Bank of Tunisia's monetary policy stabilization—which reduced inflation from 8.2% in 2023 to estimated 5.1% in 2025—boosted middle-class purchasing capacity for personal vehicles and commercial fleets. Additionally, CITY CARS capitalized on supply chain normalization post-COVID, reducing inventory holding costs and accelerating inventory turnover rates.

The automotive sector remains a critical pillar of Tunisia's economy, contributing roughly 3.5% to GDP and employing over 45,000 workers across distribution, service, and manufacturing networks. CITY CARS' performance as the market leader signals confidence in Tunisia's consumer durability cycle recovery and the broader North African automotive market trajectory.

## Why did CITY CARS maintain its dividend despite market headwinds?

The decision to hold the TND 1.250 dividend reflects management confidence in sustainable cash flow generation and earnings stability. Unlike dividend increases—which signal aggressive growth bets—dividend maintenance demonstrates a conservative, shareholder-friendly capital allocation stance. This signals that CITY CARS achieved growth through operational leverage rather than cost-cutting, validating the company's strategic positioning as profit growth outpaced revenue growth expectations.

For Tunisian retail investors and institutional shareholders, consistent dividends from blue-chip distributors like CITY CARS provide inflation-hedged income in a market where bond yields remain compressed. The dividend yield—calculated against current share prices on the Bourse de Tunis—typically ranges 3.5–4.2%, competitive against local fixed-income alternatives.

## How does this performance rank within North African automotive distribution?

CITY CARS operates in a duopolistic Tunisian market alongside competitor Wallys, yet maintains market share advantages through superior supply chain integration and brand portfolio depth (Mercedes-Benz, Renault, Hyundai franchises). Regional comparisons reveal similar growth patterns in Morocco (where automotive distribution faces higher competition) and Egypt (where inflation volatility pressures margins), making Tunisia's 16.8% profit growth notably strong.

The company's willingness to maintain dividends while reinvesting in operations—likely in digital retail infrastructure, EV charging networks, and after-sales service expansion—positions CITY CARS for the sector's energy transition. Tunisia, as signatory to the 2015 Paris Agreement, faces EU tariff incentives for EV-ready distributors, creating long-term structural tailwinds for companies modernizing their retail ecosystems.

---

#