AMMAN — Imported used
car prices are expected to sharply rise by the end of 2022, according to the automotive
sector’s representative at the Jordan Free
Zones Investors Association(JFZIA) Jihad Abu Nasser, who stated that
vehicleprices in Jordan would rise at the beginning of next year.
اضافة اعلان
Used car imports
account for close to 75 percent of Jordan’s vehicle imports, leaving less than
25 percent to new vehicle imports, according to numbers published in the Drivers
and Vehicles Licensing Department’s annual report.
Abu Nasser told
Jordan
News that the rise would be the result of high demand for vehicles and the weak
supply due to the scarcity of used cars on offer in international markets. This
combination will negatively affect the prices of cars brought to Jordan by used
car traders, at rates varying from 20 percent to 30 percent.
The main cause of this
significant increase is the unprecedented rise in the demand for used cars in
the US, which is the main source of used car imports to the Jordanian market.
A
UN Environmental agency report recently revealed Jordan “is among the top 10
markets for exports of used passenger cars from the United States, with an
exports value of about $447 million, ranking third.”
The rate of increase in
used car prices in the US is the highest since 1953, i.e. since the records of
these prices began. The jump in used car prices alone contributed a third of
the monthly inflation rise in the US in June 2021.
These rocket rises
resulted from several sources, the most important of which was the high demand
for used cars, associated with the beginning of the travel and road-trip
season.
Other factors include a
disrupted global supply of new cars due to the closure of factories as a result
of the COVID-19 pandemic and a global shortage of electronic chips used in car
manufacturing. As a result, US consumers are suffering, having to wait up to two months
to receive their new car, forcing them to rely on the used car market.
The US is not alone, as
the EU — Germany in particular — and South Korea have also seen used car prices
increase 5–10 percent in 2021.
These markets also represent major sources of
Jordan’s used car imports.
The JFZIA representative
noted that the COVID-19 pandemic caused fear among traders, who accordingly
decided to import vehicles, as the epidemiological indicators are linked to
purchasing dynamics. He added that the rise in global freight rates did not
affect car prices significantly.
Abu Nasser explained
that hybrid cars specifically had received two blows; first, the rise of prices
globally, and second, the government’s increase of the tariff on them at the
beginning of next year by 10 percent.
He stressed that the
automotive sector witnessed greater losses in 2020 compared to 2021, but called
on the government to postpone raising the planned and preannounced 10 percent
rate on customs duties for hybrid vehicles until the pandemic situation
stabilizes.
Abu Nasser contended that this will significantly affect the
market, in which hybrid sales take a lion’s share — close to 45 percent of the
total of used cars sales annually.
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