AMMAN –– Automobile traders fault government policies for local market imbalances resulting from a sharp drop in used car imports.
According to Nabil Rumman, president of the Jordan Free Zone Investors Association, imports of used cars during the first quarter of this year fell by nearly 38 per cent, compared with the same period of 2012, due to the five-year age limit restriction made by the government in July of last year.
Rumman, who represents investors in the used car market, told The Jordan Times that a total of 9,608 vehicles entered the domestic market between January and March of this year, while in the first three months of 2012 more than 15,600 used cars were imported.
Indicating that the Kingdom imports an average of 60,000 used cars a year, he expects the number of vehicles to drop this year below the 40,000 mark.
“This decline would deprive the state Treasury of nearly JD120 million in customs revenues,” Rumman indicated, noting that the sector used to inject around JD550 million before the limitation was introduced.
As an example of the distortions resulting from the restriction, he mentioned that many traders who used to import used vehicles, mainly from South Korea, have exited the market.
The policy, according to Rumman, has also pushed up the prices of old cars available for sale in the local market by around 15 per cent as supply of vehicles older than five years fell short of meeting demand by consumers.
According to the sector leader, the price range for most affordable cars rose from JD4,000-JD5,000 to over JD8,000.
Asked if potential buyers would head to dealerships selling new cars, he said that the majority of consumers are from medium income segment who can not afford newer motors.
“So the decision hit government’s revenues, traders and consumers,” he said.
Official figures indicate that there are over 1.2 million cars in the country, with nearly 70 per cent of them older than 10 years.