Perfumes: Scent per scent
September 12, 2019
Trail Runner: Hamdan al Khatri gets set for Oman by UTMB
September 19, 2019

Fueling Oman’s automobile market

Go to any fancy restaurant, shopping mall or a popular hangout spot in Oman and you cannot miss shiny, expensive sets of wheels lining the sidewalks. They make their presence felt. And, their numbers are not limited. Why?

The answer, one can say, lies in the DNA. Most people in the region share a love for luxury, high-end modes of transport. In olden days, it was their deep affection for pure-bred horses, then a key mode of transport, and a mark of status.

With modern times, fast-moving cars replaced horses, but the affection for mobility coupled with style and power remains. Oman’s unique geographical features and the lack of a standard public transportation system are among the major reasons why owning a car here becomes necessary.

“Oman is a big country. Cities are located at significant distances from each other, and there is also no reliable public transport facility for commuting within a city, or between cites. All these factors essentially mean people need personal vehicles all the time,” said a salesperson working with the dealer of a popular Japanese automobile brand in Muscat.

As per the National Centre for Statistics and Information (NCSI), the total number of vehicles registered in the country stands at around 1.5mn, out of which nearly 80 per cent are passenger cars. The number itself doesn’t look large, but considering that the total population of the sultanate is around 4mn, the average ownership of passenger cars per 1,000 population is among the highest.

Moreover with the increase in incomes, there is a growing demand for high-end super cars.

Industry experts argue that conditions in Oman require people to own cars. Besides, owning a car in the sultanate is a very straightforward process. A large section of the population has access to car loans that come with one of the lowest interest rates in Asia.

Most jobs in Oman pay relatively well, which means that having a decent middle-level job will allow a person to afford a high-end car. Fuel prices are lower compared to many other countries in the world even with the lifting of government subsidies.

Fuel prices, thus, are not a major factor affecting the decision to buy a car in Oman.

 

A unique market

Oman’s automobile market has some unique features which differentiate it from other countries in the region. Despite having lesser resources, Oman has relatively high standards of living though its automobile sector generally gets dwarfed by its wealthy neighbours. Omanis, in general, have an appreciation for quality products.

This tendency is also reflected in the country’s automobile segment as most people prefer buying high-quality cars. As per industry sources, people in Oman prefer buying better quality and performance-oriented auto products. German car brands are liked the most, followed by other European and American vehicles.

Though in terms of absolute numbers, Japanese cars dominate, but there are other reasons for this. Unlike in other countries where the automobile segment remains very cost-sensitive, people in Oman consider a host of other factors before making the purchase.

The other unique feature of Oman’s market is the special liking for large cars. Due to family size and terrain, a significant section of the country’s population likes to own a heavier and stronger four-wheel drive vehicle. This doesn’t means that other sports utility vehicles are less in demand here.

Recent changes

The recent softness in global crude prices has bought some changes in preferences. The younger generation particularly is interested more in fuel-efficient vehicles, but it doesn’t necessarily means that they are driving less.

Oman, like most other GCC countries, has a very young population which effectively means that they would keep buying automobiles for their work, leisure or family for many years to come.

Industry source say that though Omani nationals are still purchasing vehicles in large numbers, a significant section of the expatriate population is either not making purchases or is postponing the decision.

This has led to some correction in sales of vehicles in the country. As per the latest data, expatriates account for roughly 40 per cent of the country’s total population.

According to a dealer, “Salesare not on levels that we used to witness in earlier times; they are much lower. But we have witnessed such troubled time earlier also.”

Electric vehicles

Though there is much hype about electric vehicles across the world, Oman has, so far, seemingly remained untouched by the euphoria. Experts believe that lack of charging facilities and other related infrastructure is mainly responsible for this lack of enthusiasm among buyers for electric vehicles in the sultanate.

However, authorities earlier this year announced that they are working towards implementing an effective plan encompassing global best practices, which could result in the removal of barriers or hurdles that are preventing people from switching to private electric vehicles (EVs).

Industry captains, however, believe that the next 25 years will see many changes in the automobile sector, like autonomous cars, vehicles with numerous voice controls for various functions as well as those with built-in Artificial Intelligence.