Slump in Car Sales Still Going Strong, Q1 Reports Sales Down by 30%
A new report titled ‘Autodata Middle East‘ has mentioned the new car sales figures in the GCC region for 2017. As per the report, the new car sales in the first quarter of 2017 for GCC region is about 30% lesser than the numbers for the same period in 2016.
There seems to be a great slump in the market as new cars aren’t being bought as frequently as compared to previous years. The decreasing numbers represent a downward trend, as the car sales in 2016 overall too were less by 27% as compared to 2015.
The report mentions job losses as well as cost-cutting as being the primary reasons for the drop in sales. As per the report, GCC region has experienced a 30% drop, with Bahrain leading the drop by 41% drop, Saudi Arabia at 38% drop and 28% drop for UAE in the Q1.
This decline in buying has resulted in dealers and distributors holding a lot of stock of new as well as old cars. Around the end of Q1, the increase in consumer offers has improved showroom traffic with manufacturers increasing financial support on the new cars. But that comes as the pressure on certified pre-owned cars, thus making the used cars sector as uncompetitive.
Although the Ramadan/EID period led to an increase in the showroom traffic, even then sales were just as normal. The dealers with the biggest consumer friendly offers were more successful in attracting customers.
Considering that VAT is to be introduced from the start of 2018, there will be an increased demand for the Certified Pre-Owned Cars. This will be because of the differential treatment for the used car and the new cars, thus making the VAT entry a great process to ride on for anyone looking for a more affordable option