JEDDAH: The world economic crisis has impacted Saudi Arabia’s car market to the extent that sales are down by 20 to 25 percent across the board, according to a market leader. “However, the market is expected to recover in the last quarter of the year as 2010 models start coming in,” Ali H. Alireza, managing director of Haji Husein Alireza & Co. Ltd. (HHA), said at a media roundtable at the HHA head office in downtown yesterday.
Alireza, who is in the automobile industry for 22 years and a member of the Saudi Automobile Dealers Committee, said 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. “We are certainly not as badly affected as the United States and Europe whose automotive sales are down by 50 to 70 percent. My assessment is that things will change for the better in the Kingdom’s car sales later this year,” he added.
According to Alireza, the Kingdom imported 550,000 automobile units in 2008, about 10 percent 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 states.
He acknowledged that 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 is also the reason why Japanese automobile prices increased,” he said, adding that whenever the manufacturers offer rebates we tend to pass the price advantage on to the consumers. “Favorable currency rates will certainly bring down the prices of cars,” he said.
Pointing out the crisis faced by the automotive industry in the United States where banks find it extremely difficult to finance car purchases, Alireza said: “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,” he added.
Alireza said 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.” For instance, he said, Japanese cars are costing more because of the high exchange rate of the yen, which is hovering around SR104 from SR90 a year ago. Similar is the reason why European car prices tend to be high or increase, said Alireza whose company is the sole distributor in the Kingdom for Mazda, Mercury, Aston Martin and MAN Truck.
