UAE car prices are highest in GCC: FNC member

Abu Dhabi - The minister of economy clarified that car agencies usually only make five per cent profit from any vehicle purchase.

Vehicles in the UAE are priced the highest in the GCC, and a cap on prices is needed, because "consumers will face many challenges once VAT (value-added tax) is implemented", said a Federal National Council (FNC) member on Tuesday.

During the FNC session held in Abu Dhabi, FNC member Saeed Saleh Al Rumaithi from the Capital, raised the question to the Minister of Economy, Sultan bin Saeed Al Mansoori, about the prices of vehicles, which Al Rumaithi said were "the highest in the GCC".

"There was a report, which revealed that the UAE has the highest prices in cars across the GCC."
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"There will also be upcoming challenges that consumers will face once VAT is implemented next month."

He pointed out that consumers are already facing "many problems", when it comes to purchasing vehicles with a reasonable price, adding that car dealerships and agencies are making a large profit from the consumer's pocket.

However, the minister of economy said that car agencies usually only make five per cent profit from any vehicle purchase.

On the other hand, Al Rumaithi argued that people who buy or order the latest model in the market must pay a whopping Dh50,000 on top of the set price of the vehicle.

"So is the agency really making only 5 per cent profit?" asked Al Rumaithi.

The FNC member thus proposed the ministry place a cap on the prices of vehicles, which the minister of economy said was not possible.

"It is impossible, because this will heavily effect the business environment in the UAE."

"We have a free economy in the UAE, and putting a cap on luxury products contradicts this principle."

Al Rumaithi thus proposed that the ministry should insert a retail index, to compare how fair the prices of vehicles are by each agency.

"We will take this recommendation into consideration," replied the minister.

The minister said that the UAE car market is highly competitive, adding that there was a drop in prices of vehicles in August, which reached 20 per cent discounts, and he expects a further drop in 2018.

jasmine@khaleejtimes.com