Gearing Down
By Alex Malouf • Mar 4th, 2009Damage control.
The car industry has been fighting back, and one of the oldest importers has spoken out in defense of the automotive sector. Haji Husein Ali-reza, a company with more than 80 years of history in the car sector and relationships with Ford, Mazda, MAN trucks, and Aston Martin, believes that Saudi Arabia’s car distributors are misunderstood by the public.
“A lot of people say to me that the retail business must be slowing down, but we’ve never had a boom in this area as we did in the fleet sector,” says Ali-reza, the company’s managing director and general manager. “Unlike the prices of oil, people’s salaries do not tend to be as flexible or increase in the same fashion. The effects of inflation on food and rents have affected people much more than anything else,” he adds, “and this has affected their decisions to buy cars.”
Instead, Alireza and the other car dealers blame the recession in the US and the grey car market for the negative public perception. “The retail business was good, but it never really spiked up and spiked down. What is somewhat worrying us is this perception in the [Saudi] market. The troubles in the US, Europe and Japan with their own car markets has caused dealers to go out of business. These dealers cleared their stock and people thought that the same would happen in [the] GCC. We don’t have those issues here. In the US we’ve seen car dealers who have really suffered from credit issues and a lack of financing for customers who had good credit ratings, and would previously have had no problems in keeping up with payments, [who now] cannot get credit.”
“Many dealers went bankrupt and had to liquidate stock,” he continues. “We buy our cars from manufacturers and they’re not going to sell a car with 40 percent knocked off. We got some bad press in that car dealers are not passing on savings to consumers. I say that, whatever price I buy from the manufacturer, I pass on to you, the consumer.”
