Qatar’s rapidly increasing population is driving up vehicle maintenance and ownership costs, causing car owners here to be among those literally paying the price for the country’s rapid growth.
Last week, Qatar’s Ministry of Planning Development and Statistics (MPDS) reported that transportation costs jumped 6 percent last month compared to April 2014.
Analyzing these latest inflation figures, Qatar National Bank (QNB) said in a report today that vehicle prices are climbing due to higher demand from the country’s growing population.
The report is likely to add to an ongoing debate over whether the government should regulate vehicle prices in Qatar. The idea has been floated on multiple occasions in recent years and was most recently revived in March.
Officials from the Ministry of Economy and Commerce have acknowledged complaints from some residents who accuse dealerships of “price manipulation,” saying that certain vehicle models are more expensive in Qatar than in other GCC countries.
That claim is fiercely denied by some auto dealers who say their prices are not out of line with vehicles sold elsewhere in the Gulf.
The new figures also likely underscore the need for more auto showrooms and maintenance facilities to keep up with Qatar’s growing population, which has grown by 118,142 people since the start of 2015.
Real estate developer Barwa has proposed to address the issue by constructing a “Motor City” in Rawdat Rashid containing showrooms, maintenance yards, workshops and various ancillary services.
It first raised the idea in 2011, and then revived it last October. The company said at the time that construction on the development was expected to last four years.
Rising inflation
Last month’s overall increase in Qatar’s cost of living was relatively modest. Prices for consumer goods were up 0.9 percent last month over April 2014 and unchanged from March 2015, according to the MDSP.
Still, in addition to transportation costs, Qatar’s growing economy and expanding population continue to put upwards pressure on education fees and rental rates.
However, that was offset in part by declining prices for recreation and cultural activities as well as a drop in communication costs in April.
The increase in food prices was also modest, as Qatar benefitted from record global harvests, large US stockpiles and weak international demand, according to QNB.
While inflation may have been muted in the first four months of the year, QNB is warning local consumers that their expenses are likely to creep upwards in the coming months.
It predicted that inflation would rise to 2.5 percent by the end of this year, before accelerating to 3.2 percent next year and 3.5 percent in 2017 due to further increases in residential rates and a recovery in international food prices.
That news is likely not going to sit well with residents who say that salaries are already failing to keep pace with Qatar’s increasing cost of living.
Thoughts?
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Appealing thing about life here is the teasonable vehicle prices. Shame.
How is this even debatable? Every “dealer” here is a monopoly owned by a select few. BMW, Land Rover, etc owned by Al Fardan. There are two dealerships in Doha, both owned by the same. It’s the same with Mercedes (NBK), Ford, Chrystler, Jeep, Dodge by the (Almana Group). There is no price negotiating because each car manufacturer is only represented in Qatar by one monopolistic company. You want fair pricing? Allow some competition and free market. There is a flat import fee in Qatar of 5% of the value of the vehicle. Just look at pricing elsewhere and do the math. Most of these brands are being marked up by 30-50% over US prices. (I use this example as the dollar and riyal are locked together at a steady rate).
Don’t even get me started at the extortionate maintenance and service charges. It’s the exact same problem and you are often threatened of voiding warranty if you take it for basic maintenance elsewhere.
Perhaps they don’t see it as monopolies but as simple business opportunities.But I would love to see the warranty records and spent parts that goes through the syatem.The real thing that irritaed me was the need for a police report to get some basic painting done on a car or motorcycle.Scratch or dent something on your own and are willing to pay for it and you get the run around.
I was tempted to get an old jeep or something and go rat-rod with it. Rust, scratches and rattle-can – how could they tell if it was deliberate or left by some git doing a hit-and-run on your car in a carpark?
couldn’t agree more.& add to it a lousy after sale services
Landlords, car dealers, LC drivers….I’ve started to take my car to a local garage for all maintenance and repair. We need to take our business to the small guy.
what do landlords& LC drivers have to do with car dealers….?
& taking your car to local garages might make you lose your car coverage by the dealership
I just mentioned the leeches and hazards of Qatar.
Your kind are also among the leeches…
not even kinda ,haha
My kind? Oh yes, the kind who have to earn their living.
Rapists, serial killers and even Nazis also had jobs to “earn their living.”
Just because you get paid to do something doesn’t mean you are not a worthless scumbag
I may be a scumbag, but not worthless because I’m being paid.
You just have to take a look at some of the offers for exactly the same car in the UAE to see the extent of how much we are being ripped off in Qatar when it comes to buying new cars and poor after sales service (if it can be called service in most cases).
its a cartel – zero competition – they system is rotten and plays right into this
Obviously, the “pressure” is only on maintenance costs. Reason – once you are a customer, you don’t have an option and one can be easily ripped off. Or the dealers can threaten with warranty clauses.
New cars are available in plenty for the growing population and I don’t think there is a real “pressure” there. The cars are just overpriced, that’s all.
You don’t have to buy brand new vehicles. That means the dealer warranty requirement is moot and you can go to the independent garages who have to compete on merit and who aren’t financing a fleet of cars to ferry joggers around stadiums. More environmentally friendly too.
The only way I see things changing is if a large percent of the population starts DIY’ing at least their regular services: oil change, brakes, etc and they order spare parts from abroad. Since this will never happen vehicles here are treated as “take it or leave it” and most choose to leave it. This also reflects on traffic attitude and general lack of common sense/interest towards other people. When you have an over-supply of clients it takes a highly ethical person not to take advantage of that. When you can supply sub-par services and still make a killing, the general belief is “why bother?”…To answer that question one must have some innate moral values. I’ll leave it to MIMH to expand on this as morality is something a certain group claims exclusivity on. 🙂