Friday, July 01, 2022 | Dhu al-hijjah 1, 1443 H
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Car prices are rising in the region -

It is expected that a fresh increase in the prices of some products including all kinds of cars and vehicles is likely in the near future. Some automotive brands are witnessing an almost daily increase, while a number of American and European car manufacturers have stopped producing certain types of models altogether, especially small ones, which opens up the opportunity for distributors to acquire Korean, Chinese and other international brands.

Market pundits have witnessed a boom in the prices of new cars in the region, which is also reflected in the prices of small used cars at higher rates ranging from 20 to 40 per cent, as a result of the high fuel prices and value added. There is also a problem linked to reducing financing options, in addition to the challenges caused by supply chain disruptions.

Today, many people in the region prefer to buy used cars because of the competitive prices, while the demand for large used cars is also decreasing due to the eroding economic conditions and incomes of citizens and workers in the region. This situation is not only faced by the countries of the region, but several other Arab countries are also facing the same problem due to the excessive demand for light used cars as motorists are wary of incurring high fuel bills.

Car markets at the regional and global levels continue to be impacted by supply chain disruptions, first by the pandemic and more recently by the outbreak of the Russian-Ukrainian war,

Some American companies have stopped manufacturing certain types of cars, especially the small ones, due to falling numbers of workers, falling profit margins, and the severe shortage of semiconductor chips that are vital to the car manufacturing process.

The great shortage in the number of new cars in the region greatly affects the owners and the distributors which have allocated a lot of services, equipment and machines to provide the necessary maintenance to new consumers. Many citizens have begun to rely on used cars, especially those who enter the market for the first time. Some have also taken advantage of the shortage to resell bookings in their name to others and thereby earn a good profit.

Electronic platforms offering marketplaces for car sales and purchases are also thriving, without being responsible for the after-sales services. It is likely that these electronic sales will continue as a result of supply and demand until market conditions are corrected and factory supply chains and shipping capabilities return to normal.

Ongoing tensions between Russia on the one hand, and the European Union and the US, on the other, will certainly have repercussions for foreign trade and will inevitably lead to disruptions in the industrial supply chain, thereby negatively impacting the automobile industry and other industries in the future.

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