23 August 2017


JEDDAH — The sales of the imported second hand cars have dropped by about 60 percent, local daily Al-Madina reported quoting market sources.

The sources attributed the huge drop of sales to the recession in the car market — both internationally and locally due to the decrease of profits, the rising costs of shipping, the high cost of insurance and the increase of petrol prices in the Kingdom.

Investors in the sector expected the recession in the imported used car market to reach up to 70 percent and said a large number of them would quit the business.

The sources said the importers have stopped importing used cars and started disbursing the cars in their showrooms with minimal profits. The importers have also started giving longer warranty periods for the spare parts to lure buyers.

Awad Aljohani, chairman of the committee on car showrooms at the Jeddah Chamber of Commerce and Industry (JCCI) said the car market in the Kingdom is facing acute recession, which has led to a sharp drop of about 60 percent in the sales of the imported used cars.

He said the importers have stopped importing so as not to compile a large number of cars in their showrooms without any sale. "They only imported used cars which were earlier demanded by buyers," he said.

Mohammed Al-Barakati, one of the importers of the used cars, said the purchases have dropped by about 70 percent and were expected to go down further in view of the high costs of shipping and insurance.

"The upping of the petrol prices in the Kingdom is one of the reasons that led to the market recession," he said.

Barakati said the imports of used cars dropped by about 24.5 percent in 2016 compared to the previous year. He said last year about 70,000 used cars were imported against 92,300 cars in 2015.

© The Saudi Gazette 2017