A comparison of the prices of two types of new cars in the Arab countries included in the "Numbeo.com" index of the cost of living in the world shows a number of basic observations, including that most countries in which there are high prices of gasoline also have high prices of cars.
However, this observation is not general. In a number of Arab countries that have high fuel prices, we find that the prices of new cars are low compared to the rest of the Arab countries, such as the case of Sudan. What Arab countries are the most expensive and cheapest in the prices of the Japanese “Toyota Corolla” and “Volkswagen Golf” cars? German?
What are the factors that control the price of new cars, up or down?
The prices of new cars are generally affected by international external factors, and by local internal ones related to the rates of taxes and customs fees applied to new cars, as well as the foreign relations of Arab countries with countries that produce major brands in the world of tourism.
For example, the reason behind the dominance of European brands in a market like the Moroccan market is attributed, in part, to the free trade agreements concluded between the Kingdom and the European Union, which include exemption of imported cars between the two parties from customs duties, which reduces the prices of European cars more compared to their Asian counterparts, for example.
With reference to the "Nimbo" index, the prices of new Toyota Corolla cars vary in Arab countries within 3 groups:
Between 31 thousand and 41 thousand dollars: Syria, Yemen, Jordan and Palestine.
Between 20,000 and 30,000 dollars: Qatar, Saudi Arabia, Bahrain, Lebanon, Morocco, the Emirates, Algeria and Tunisia.
Less than $20,000: Libya, Kuwait, Egypt, Sudan, Iraq, and Oman.
As for the prices of new cars, "Volkswagen Golf 1.4", the classification is as follows:
Between 30 thousand and 37 thousand dollars: Syria, Sudan, Jordan and Palestine.
Between 20 thousand and 27 thousand dollars: the Sultanate of Oman, Kuwait, Qatar, Saudi Arabia, Lebanon, Bahrain, Morocco, Algeria, the Emirates and Tunisia.
Less than $20,000: Yemen, Libya, Iraq, and Egypt.
Citizens reveal the percentage difference in car prices in Saudi Arabia from the Emirates and Kuwait, and the owner of a car showroom: Prices are going down!
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It is worth noting that the aforementioned prices pertain to a specific period, which is mid-January 2023, which is the time when Al-Jazeera Net reviewed the "Nimbo" website, which includes more than 8 million and 318 thousand prices for a product and service, in more than 11 thousand cities. In the world, these prices are related to many areas, including the cost of living indicators.
The three most expensive Arab countries share the prices of Toyota Corolla cars (Palestine, then Jordan and Yemen) in that the price of a liter of gasoline is high compared to the rest of the Arab countries, as it ranges between $1.3 in Jordan and $2.2 in Yemen, but a country like Sudan reaches The price of a liter of gasoline is $1.1. However, you will find it among 4 Arab countries that are the cheapest in Toyota Corolla cars (Libya, Kuwait, Egypt and Sudan).
It is important to note here that the comparison between the prices of the two types of best-selling cars in the world (Toyota and Volkswagen) does not provide a comprehensive comparison of prices in the car markets in the Arab countries, because Japanese brands such as Toyota, for example, have large market shares in the Gulf region. But it is not like that in other Arab countries such as Morocco, Algeria and Tunisia.
Also, the used car market in many Arab countries is much larger than new cars, and the ratio, for example, in Morocco reaches 3 used cars for one new car.
A side of the traffic on one of the Nile River bridges in Cairo (Associated Press - Archive)
When a person buys a new car, there are several factors involved in determining its price:
The volume of global production of this car, and the volume of demand for it in the local market for each country separately.
Costs of car ownership, insurance, fuel and maintenance.
Features (safety, comfort, storage space, and other interior and exterior details), and technological features (driving, lighting, cameras…).
When the end of each year approaches, car dealerships are quick to offer price cuts (starting in October) to make way for new car models to be sold for the new year.
Terms and specifications of bank loans allocated for the purchase of cars in a country.
To get acquainted closely with the conditions of the new car markets in the Arab countries, and the factors that control their prices, 4 Arab countries will suffice, including the second most expensive country in terms of prices for Toyota Corolla and Volkswagen Golf cars (Jordan), and the cheapest country (Libya), with a view of the market. Cars in the Levant region (Qatar) and others in the Maghreb region (Morocco).
Below, we review the opinions of experts in the car trade from those countries.
South Korean cars displayed on the occasion of a festival in the Sudanese capital Khartoum (Anatolia - Archive)
Ziad Nabulsieh...a car dealer in Jordan:
The increase in car prices in Jordan is attributed to the customs tax rate on new cars in the Kingdom, which is 200%, and includes customs duties and a number of taxes. car.
The high demand of Jordanians for electric and hybrid cars is attributed to two factors, the first of which is saving energy consumption (a full charge of electricity enables a distance of 500 km), and the fact that this type of car is exempt from customs tax, and electric and hybrid cars currently account for 65% of the car market. In Jordan, the rest are cars that run on gasoline only.
The 3 most demanded cars in the Jordanian market are: the German Volkswagen, the Chinese Changan, and the American Chevrolet.
Al-Mahdi Al-Kawafi.. Director of a car import company in Libya:
The decrease in car prices in Libya is due to the low level of customs duties applied to the import of cars in general, new and used, as the value of these fees does not exceed $350 per car, and the lack of a car dealership system also contributed to the decrease in prices, as there is no company that has a monopoly. Import and sale of a specific type of car.
Except for customs duties, the Libyan government does not subject new car prices to any tax.
More than two-thirds of the cars that Libyans buy are used cars, not new ones, because used prices are less expensive than their new counterparts, and government agencies remain the ones that most buy new cars.
Low car prices in Libya prompted a number of citizens of neighboring countries, especially from Algeria, Sudan and Niger, to come to Libya in order to buy cars, whose price remains lower than those countries.
Japanese cars, led by Toyota, and South Korean cars (Hyundai and Kia) dominate the sales of the Libyan car market.
Fadi Abudiak.. Branch Manager of a Car Agency in Qatar:
What determines the level of new car prices is primarily the average per capita income between the weak, the medium and the high, and it is also subject to market supply and demand data. The demand for economic cars is high in the Levant countries (Jordan, Palestine, Lebanon and Syria) and Egypt, and therefore their prices are high in those countries compared to the Gulf countries. And whose residents have high incomes, and therefore they are looking for cars with powerful engines, which is a different class from economical cars.
In Qatar and the Gulf countries in general, the high income of the population pushes them to buy new cars with high specifications, and therefore their prices are high, while the demand for them is low in countries such as Iraq and Libya due to the income difference.
Car prices have increased by 15,000 thousand riyals
in a period of less than a month
. Are some car agencies entitled to operate a
leasing company? From the same share allocated to customers, new cars are transferred to the leasing company. Where is the role of consumer protection in all of this? Are exhibitions entitled to sell at exaggerated prices
? Is there any answer? !
- Ibn Qatar (@ebnqataralmulla) January 4, 2023
Among the changes that occurred in the car market in the Gulf countries and the Arab region in general is the entry of new Chinese cars at a low price, which made the demand for used cars less.
Adel Bennani.. President of the Association of Car Importers in Morocco:
There are basic factors that control the selling price of cars, including the position of the brand in the car market, and its position with the local consumer. Increase its market share.
The price of the cost of producing a car, for example, in Japan is the same for all countries of the world, but the producing company sets a different price for each specific country, taking into account its reputation in that country and the quantity of cars sold in it. A company that sells 100,000 cars in a country will not set a similar price for it in another country. Another in which it sells only a thousand cars, because in the second market it wants to increase its market share, and therefore it will lower the price to attract new buyers.
New car prices in Morocco increased by about 17% on average during 2022, which negatively affected the volume of sales in the local market, according to the Association of Vehicle Importers in Morocco (AIVAM).
- Al Jazeera Economy (@AJAeconomy) January 9, 2023
The difference in the prices of different brands of new cars corresponds to the desire of manufacturers to increase their market shares, depending on the level of GDP per capita.
Another major factor affecting new car prices is the cost of sea freight, which differs from one country to another depending on the distance and the laws followed in this sector, and the different rates of customs duties and taxes imposed on new cars greatly affect it. For example, Morocco applies a value-added tax of 20%. , while the percentage decreases in the UAE to 5%.
Global market data
The number of new cars sold in the world decreased in 2022 to 52.4 million units compared to 56.4 million in 2021, and the decline in car production led to an increase in prices in global markets, and among the factors behind the decline in production is the problem of semiconductor supplies, and supply chain disruptions in The world, the repercussions of the Russian-Ukrainian war, and the resulting high cost of energy and raw materials, as well as the factor of economic tension between the United States and China.
In addition to the international factors for the rise in prices, there is an equally important factor in the Arab region that affected the purchasing power of those wishing to buy cars, which is the drought that struck a number of Arab countries in 2022, which contributed to the decline in the demand for purchases.