Khaleej Times cited Mr Ali H Alireza MD of Haji Hussein Alireza & Company Limited as saying that car sales in Saudi Arabia have gone down by 20% to 25% across the board, the sole distributor in the kingdom for Mazda, Mercury, Aston Martin and MAN Truck.
Mr Alireza said while addressing the media at the HHA head office that "However, the market is expected to recover in the last quarter of the year as 2010 models start coming in."
He said that there was no doubt that there was a general market slowdown, so it was wrong to presume that the current global economic crisis had not affected this part of the world.
He added that "We are certainly not as badly affected as the United States and Europe whose automotive sales are down by 50% to 70%. My assessment is that things will change for the better in the kingdom's car sales later this year."
According to Mr Alireza, the kingdom imported 550,000 automobile units in 2008 about 10% higher than in the previous year. Of them 150,000 units were re-exported. He added that re-exporters are those who purchase automobiles in the Kingdom and re-export them to countries, notably to Africa and the CIS countries.
He said that, however, automobile prices however continue to increase, partly because of the prices fixed by their makers abroad and partly due to the fluctuations in the currency market. We are restricted to prices coming from the overseas factories. Fluctuations of the yen are also the reason why Japanese automobile prices have increased. Whenever the manufacturers offer rebates we tend to pass the price advantage on to the consumers. Favourable currency rates will certainly bring down the prices of cars.
Mr Alireza said that referring to the crisis faced by the automotive industry in the US where banks find it difficult to finance car purchases. He said that "In Saudi Arabia, credit is still available and banks are financing car purchases. Here there is no shortage of cash unlike in the United States. The drop in the prices of car components like steel cannot directly bring down car prices. If it persists for a long time and together with it if the currency rates become favorable then only prices can come down.
He added that for instance, Japanese cars are costing more because of the high exchange rate of the yen, which is hovering around SAR 104 from SAR 90 a year ago. For the same reason European car prices also tend to be high or go up.
(Sourced from Khaleej Times)
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