Qatar residents believe they are paying more for new cars and spare parts than people living in other countries in the Gulf, according to a new survey recently conducted by the Ministry of Economy and Commerce (MEC).
The results, compiled from answers by 4,000 residents, appear to be the latest showing of customer dissatisfaction with Qatar’s automotive sector.
In addition to feeling ripped off, residents also reported having limited confidence in car dealers and service centers.
According to the survey, 94 percent of respondents believed vehicle prices in Qatar were high compared to other GCC countries.
While some manufacturers such as Mercedes-Benz advertise standardized prices across the region, previous studies support the perception that car buyers in Qatar pay a premium.
Last year, Cost of Living Reports Middle East reported that a small SUV costs, on average, $46,710 in Qatar, although several local dealers advertise base models for less.
That’s significantly more than in the UAE ($26,850) and Bahrain, Kuwait and Oman ($39,000). It’s also higher than the $40,487 price tag for such vehicles in Saudi Arabia.
While the MEC has not offered any analysis of the price differentials, it has attempted to make new vehicles cheaper in Qatar by introducing more competition.
In May, it “clarified” that any businesses with a valid license can import and sell vehicles, even if the manufacturer already has an exclusive dealer in Qatar, the Peninsula reported.
Spare parts
However, some experts have suggested that similar perceptions about the price of spare parts in Qatar are overblown.
Some 95 percent of survey respondents believed that replacement parts in Qatar are more expensive than in other GCC countries.
But in an interview with bq magazine earlier this year, Subhash Joshi – the head of consulting firm Frost & Sullivan’s automotive department in the Middle East – said manufacturers have relatively consistent equipment prices across the GCC.
Most variations are due to mark-ups, Joshi said, adding though that there are limits on how much dealers can hike prices:
“With open boundaries across the GCC, it is difficult to drive price differentiation at an overall level … The prices in Oman are slightly higher than UAE and KSA, but there is only a minimal difference and it is limited to a few auto part categories only.”
Other findings of the survey include:
- Between 81 percent and 93 percent of participants believed that service costs were too high, both during and after the warranty period;
- Nearly 74 percent believed that showrooms did not present customers with the right information about the cars;
- Slightly more than 51 percent believed mechanics at service centers were highly skilled;
- Almost 64 percent expressed confidence in the quality of spare parts provided by official agents;
- Nearly 79 percent said service centers changed multiple car parts, even when a vehicle was brought in to replace a single faulty item; and
- Nearly 71 percent said they were not fully informed why a car brand was recalled.
Ministry pressure
Qatar’s automotive sector has been under greater scrutiny by the MEC for more than a year.
Starting in August 2015, the ministry penalized several dealerships and service centers for violating Qatar’s consumer protection law following customer complaints of lengthy delays, arbitrary pricing and fake spare parts.
That was followed by MEC inspectors temporarily closing Qatar’s Nissan, Dodge, Honda, Land Rover and Toyota showrooms following separate raids over several months.
The ministry alleged that the dealerships had failed to inform new car customers that their vehicles had been damaged and repaired.
Dealers told Doha News that the issue related to small scratches and dents that occur in shipping and are repaired before the vehicle is sold.
Officials subsequently issued a public warning to dealers, instructing car agents and showrooms to obtain “a written endorsement” from customers that proves they are aware of all repairs performed on a vehicle prior to its purchase.
The MEC has also made regulatory changes to benefit consumers, such as prohibiting auto dealers from voiding a customer’s warranty solely because his vehicle was serviced by a third-party garage.
The ministry said more new rules for the automotive sector are on the way.
In its weekend statement, the MEC said it is preparing a guide that will regulate “all aspects” of the interaction between auto dealers and customers, including the sale, warranty, service and recall of vehicles.
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