Auto sales witnessing steady decline

By Vinod Nair — MUSCAT: Jan. 28 – The number of private vehicles registered in Oman dropped steadily in 2016, and it was more evident in the statistics of the final months of that year. As per the details available from the National Centre for Statistics and Information (NCSI), there were around 1,366,148 vehicles on the roads of Oman as of November 2016.

BMI research predicts that the passenger car segment will experience only a modest recovery in 2017, with aggregate vehicle sales expanding by a total of just 8 per cent across the period of 2017 to 2020, representing average annual growth of just over one per cent per year. It predicts annual growth in total vehicle sales of just 2.5 per cent in 2017, taking total sales to 94,108 units, followed by annual rises ranging between 1.1 per cent and 2.6 per cent over the period 2018 to 2020.

Sources at auto dealerships attributed the decline to austerity measures imposed at the government and corporate levels with regards to spending. The decline in the number of vehicles for commercial purposes directly supports the economic conditions. Registrations for commercial vehicles dropped significantly by 23.9 per cent to 19,906 in 2016 from 25,766 in 2015. In the rental segment, the decline was by 18.7 per cent, taxis by 19.3 per cent, motorbikes by 29.4 per cent and vehicles for diplomats by 19.2 per cent.

“The purchase of new commercial vehicles is ruled out unless there is an absolute necessity. We get a very few quests for quotations in terms of bulk or small purchases as it is generally the practice. Clients are also giving attention to fuel efficiency and maintenance and after-sales services, which was not strictly followed in the past,” said a sales executive of a leading automobile brand.

“A lot of internal circulars have been sent out and where expenditures are audited very seriously and that is what we get the feedback from our regular clients,” he added. Another sales executive of a luxury brand said the pressure is more on premium vehicles because of their maintenance costs and availability of spare parts. The number of new private vehicles registered in 2016 dropped by 6.9 per cent from 74,113 in 2015 to 68,991 in 2016. Registrations dropped consistently during October (5,400), November (4,533) and December (4,300). More expatriates are now opting for used or pre-owned cars that are available in newer models too.

“Here past accident records may be a concern but the expatriates are taking chances because of the price attractions. Also personal loans are arranged by the used-car traders,” said Abdul Rahim, a auto dealer of used vehicles. “I will prefer buying a new car always, but I feel economic uncertainties stopping people some long-term investments.” The statistics can be related to the fact that the number of accidents registered in Oman dropped by 32.8 per cent in 2016 and fatalities from accidents by 2.5 per cent.