Recession cripples car sales

Saudi Gazette report RIYADH – New car sales are declining in the Kingdom, according to an investigation by Al-Riyadh Daily. However, demand for cars on installment payments and small economic cars and four-wheeled-drives has not been affected. One car show room owner said that since the start of the year, the market is experiencing a recession due to a lack of customers and tight liquidity among some citizens, which has seen cars accumulating in showrooms. The owner of an auto sales firm, Mubarak Al-Qahtani, said that prices have dropped ten percent and that demand is currently for used cars, especially with families having to budget for school costs at the start of the school year. One salesman, Jazaa Mutairi, said foreign workers are dominating car sales, depriving locals of business. “Foreign workers monitor customers and try to convince them with a number of methods to sell their cars at reasonable prices,” Mutairi said. He added that poor government regulation had meant a poorly regulated auto sales market. Economic adviser, Ahmed Al-Shihri, said that the International Monetary Fund estimates indicate that GDP growth of the Saudi economy until the end of the year would not exceed 1.2 percent. He said that declining household wages had contributed to the decline in car sales and car imports during the first half of 2016.