More people in Qatar are opting not to spend money on a new or used car this season, in part due to economically uncertain times, car dealers and residents have said.
Speaking to Doha News, a sales manager at a showroom in Doha that sells a variety of vehicles, including Toyota, Chevrolet, GMC and Honda, said his new vehicle sales have fallen almost in half over the past six months.
”People who have money are saving it rather than spending it, because they’re afraid of what will happen in the future,” he said.
The reluctance comes as Qatar takes action to deal with falling oil prices and its first projected government deficit in 15 years.
That includes layoffs by some prominent companies, reduced budgets for others and rising electricity and water costs for households and firms.
According to the sales manager, who asked not to be named, the falling demand has caused the prices of some new cars to drop by 30 to 35 percent in recent months.
Fewer people are also buying used cars, but their prices have not dropped as much, he added.
Speaking to Doha News, many Qatar residents said that layoffs at different companies have left them more hesitant to spend money and feel more wary about their financial security.
One expat who works at an IT company said she has had a 2009 Honda Jazz for around six years, ever since she was single. Now she has two children and has been hoping to buy a bigger car to accommodate her family.
But after hearing about various contract terminations, she said she decided not to pursue a car loan.
Another resident, a 59-year-old expat who works in healthcare, told Doha News that as oil prices continue to fall and he gets older, he worries that his job here may be at risk.
He explained that his company has not renewed contracts of residents who are over 65 years old, and that employees whose ages range from 60 to 65 years old are constantly at risk of having their services terminated.
He added that he and his wife would like to upgrade from their 2012 Grand Cherokee and 2012 BMW, but won’t because of the financial climate.
Car loan woes
This week, Qatar Tribune also cited car dealers and residents who voiced the same concerns. A car sales executive told the newspaper that expats, especially those who worked in the oil and gas sector, were usually keen to buy 2015 models, but this year “are hesitant to invest in new cars.”
And resident Mohammed Nisar told the Tribune that many of his colleagues who took car loans and lost their jobs found it very difficult to clear their loans.
”I have learned my lesson, I don’t want to take any chances,” he said.
However, another sales manager at a showroom that sells Mitsubishi vehicles told Doha News that demand has not been affected by recent events.
Meanwhile, online sales representatives for used cars said that purchases usually decline during holidays, adding that they didn’t believe any drops this season were due to financial security concerns.
As global prices plunge to less than half of what they were last summer, energy firms in Qatar have been cutting staff and reprioritizing projects.
The impact has also been felt in other state-backed organizations including , Sidra Medical and Research Center, which is set to cut more than 200 jobs by the end of this month as part of a new “rightsizing” process.
The measures come as Qatar announces a new budget that entails curbing spending by more than 7 percent, or some QR16 billion, from the last fiscal year.