Auto market rebound likely this year?

Muscat, March 27 – Uncertainty in the job market and salary delays, especially in the private sector, have continued to impact new vehicle sales in the country. A rebound, however, is expected this year, industry sources told the Observer, with oil prices remaining steady at above $60 per barrel since the second half of 2017.
“Most buyers are still waiting for the salary payments to stabilise in the private sector and also the job uncertainty to ease out,” said a senior sales manager with a leading automotive dealership.
He said the government sector continues to go slow on fleet purchases, which hopefully should improve with the loosening of wallets this year.
Easy availability of loans for used vehicles (three- to four-year range) is also encouraging potential buyers to avoid investment in new products with higher depreciation.
“Buying a new car is like a dream coming true, but I prefer waiting for some time for the market to improve. Used cars are easily available in pristine condition this year,” said Hetal Shah, who is considering purchasing his first car in Oman.
The market is yet to gauge the impact of new rules for issuing driving licences to expatriates in the coming years.
The number of new private vehicles registered in Oman declined 29.3 per cent in January 2018 to 3,753, compared with 5,309 in the same month a year ago.
The number of new government vehicles registered declined 6.7 per cent and rental vehicles by 7.6 per cent. At the same time, there was a 6.3-per cent increase in the sales of commercial vehicles in January 2018 to 1,212, compared with 1,140 in the same month a year ago.
There has been a 22-per cent decline in the number of vehicles from 6,950 in January 2017, compared with 5,420 in January this year. According to the BMI Research report, new vehicle sales are expected to grow by 3.3 per cent in 2018, with commercial vehicle sales at 3.9 per cent set to outperform passenger vehicle sales at 3 per cent.
As per the report, 2018 will prove to be a year of modest recovery for the Omani new vehicle market following four consecutive years of decline.
The positive forecast comes against the backdrop of rising oil prices and likelihood of significantly higher GDP growth in the coming 12 months.
The rebound in 2018 is unlikely to offset the near-40 per cent contraction seen in the market since 2013, when 200,000 units were sold.
BMI expects vehicle sales in the Middle East and North Africa to grow 7.2 per cent in 2018, compared with a 5.8-per cent decline in 2017.
Despite the growth, the report says expected sales volumes of 3.75 million units will be far below the 4.28 million sold in 2014.