Used car prices plummet amid COVID-19 pandemic
by Menatallah Ibrahim
Stay-at-home culture and fear of contamination have taken their toll on the used car market in Qatar, causing prices to fall dramatically.
For the last four months, Qatar has been enforcing measures to prevent the COVID-19 pandemic from spreading within the country, one of which is asking people to stay at home and only leave when necessary. Used car businesses remain severely impacted by this lack of movement, with little to no insight on when things will return to normal.
Doha News spoke with Sanaa Ouahmane, General Manager at Almana Used Cars, to find out more about the drop in the market.
According to Ouahmane, her company has seen their retail market dip by about 90%, and prices drop by roughly 25%, mainly because the pandemic has affected the production of cars globally. In Qatar, as in many places, people also seem to be too afraid of examining the cars before buying them — even at a discount — due to a fear of contamination.
“The fact that barely anyone wants rental cars now is making us decrease car prices,” says Ouahmane. “After all, we need to attract clients to cover our expenses, so we must put the effort in.
“I cannot tell you that they [clients] are asking us to decrease prices though, because the clients are not even there.”
The wider economic impact of the pandemic also plays a significant factor in Qatar’s car market. During the last couple of months, many people have lost their jobs or been hit with pay cuts, while many more are wondering when their last day of work will come. Buying a car with this heavy uncertainty isn’t worth the risk.
“A car for any person is an investment,” adds Ouahmane. “Right now, clients are insecure. We hear every day about people leaving because of the economic crisis caused by the pandemic. So, understandably, clients are saving money rather than spending it.”
In order to understand whether the used car market also dropped online, Doha News spoke to Anas Al Haj, co-founder of the car advertising website Q Motor. Al Haj shared some statistics regarding the numbers of cars advertised on his website pre- and post-pandemic.
“We noticed a huge and very noticeable drop in terms of cars advertised on our platforms and other platforms as well. On ours, the number has dropped from 80 cars per day, whether posted by dealers or individuals, to 45 cars per day,” he saysj.
Al Haj also added that he has been examining the market closely to monitor the situation, and has noticed a drop of 5% in terms of used cars. He believes it could potentially drop more in the coming months due to certain restrictions.
“There are many elements that affect the buying process. The main one is that the new licence, which Qatar used to issue every day, is not available anymore,” he explains. “Driving lessons have stopped too.”
Commercial businesses are not the only ones affected by the sudden drop. Individuals looking to sell their cars for some extra cash to help during this pandemic have also been left struggling, unsure whether to wait for things to potentially get better. Among those people is Ashraf Mahmoud, 43, who is currently working part-time after losing his old job four months ago.
“My salary is barely enough to cover living expenses,” he told Doha News. “I have been trying to sell my car to gain some extra money, but I realised that I would actually be losing a lot of money, especially as I only got two offers for it.”
Sadly, the market drop isn’t expected to recover any time soon. It has even affected manufacturing companies abroad, whose cars are imported to Qatar.
“It [the car market] is definitely not going to recover fully this year for many reasons. The supply worldwide is affected,” says Al Haj. “Countries stopped production for eight weeks or even more. Whenever the market opens again, we will always be behind by two months in terms of supply and availability… it takes months to recover, not days.”
When Doha News asked car rental companies in Doha about the estimated time they expect the market to recover, all of them said roughly around February to March 2021.
