The Saudi Arabian car market is forecast to roar up and disengage itself from shallow depressions once 2010 car models hit the road. In a guarded yet clear assessment of the car business in the Kingdom, Ali Husein Alireza, managing director of Haji Husein Alireza & Co. Ltd., and a member of the Saudi Auto Dealers Committee of the Jeddah Chambers of Commerce and Industry, said the drop in sales at present would witness a reversal after summer when models for 2010 start to come in. “The arrival of the new models will determine the market performance for the year,” he added. In a meeting with the press on Tuesday, Alireza admitted that car sales in the Kingdom skidded by 20-25 percent this year as compared from the preceding year as a result of the global economic slowdown. He said that out of 550,000 cars exported to the Kingdom last year, 400,000 were sold locally, while the remaining 150,000 cars were re-exported to African countries and to the Commonwealth of Independent States. Despite a slump in sales, however, he dismissed reports of cuts in prices to attract buyers, saying that rebates were applied only on clearance sales of old models. He said it is the car manufacturer that determines the prices, and as dealers, “if there are rebates from the factory, we pass them on to customers.” Alireza explained that as a result of the global financial straits, an attitude of wait-and-see evolved among prospective buyers, on the expectations that prices will fall as credit squeeze battered countries that manufacture cars, particularly the US. But it is not the case in Saudi Arabia. Alireza said the Kingdom's liquidity remains high. Saudi financial institutions continue to be robust, he noted, citing the case of local banks providing easy financing schemes in the purchase of new cars. Unlike in the US, where due to credit squeeze, sellers would go for a bargain provided it is payable in cash, in the Kingdom, however, since financing packages come in handy, prices of cars were not expected to drop. Moreover, Alireza said currency fluctuation also influences the price of cars. He said in Mazda cars, for instance, since the price is in yen, whatever fluctuations occur in the currency markets definitely affect their cost. The dollar traded at 98.71 Japanese yen on Tuesday from 97.84 yen in New York. In its segment, Mazda cars take 4-8 percent of the Saudi market, he said. Nonetheless, Alireza still paints an overall “good” outlook for the Kingdom's car market. Haji Husein Alireza & Co. Ltd. is the exclusive dealer of Aston Martin, Ford Mercury, Mazda and MAN trucks in Saudi Arabia. __
