Page 402 - Ministry of Economy - December 2017

Fair value car pricing system proposed

People in UAE pay highest prices for new cars across Gulf, FNC member tells minister
Abu Dhabi: People in the UAE are paying the highest prices for new cars in the Gulf countries, a member o
the Federal National Council said on Tuesday.

Saeed Saleh Al Rumaithi, a member from Abu Dhabi, put a question to Sultan Saeed Al Mansouri, Minister
of Economy, proposing a fair value pricing system and a profit margin for almost 75 car agencies across the
country, to stabilise local prices in an open economy.

“People in the UAE are paying the highest prices for new cars compared to the GCC and many foreign
countries,” Al Rumaithi said.

He added with the value-added tax VAT, which will be levied beginning next year, and some illegal practices
by some car agencies, the car prices would grow by 20 per cent from 2018.

Al Rumaithi held the Ministry of Economy and its Consumer Protection Department responsible for curbing
the increase in car prices.
Keep up to date Sultan Bin Saeed Al Mansouri, Minister of Economy who is also Chairman of the Supreme Committee for

Consumer Protection, said the proposal to set up a fair value pricing system for car agencies will be
considered by the newly set-up car agencies committee.

Al Mansouri said the UAE automobile market for new cars is growing fast and wide diversity of vehicles
being traded has made it more competitive. The car prices across the country are determined by some
market forces including cost of production, energy, transportation and inflation in the manufacturing
countries.

“As the dirham is pegged to the US dollar, exchange rate will move in tandem with dollar fluctuations in
relation to other currencies, which also affect the prices in the UAE,” Al Mansouri said.

However, the minister said that a survey of car prices in the GCC countries found that only four cars were
sold at higher prices in the UAE. “Car agencies in the UAE make no more than 5 per cent profit margin.

“Competition has sent car prices nosediving since the middle of this year. Prices have decreased by 20 per
cent since mid-August and they are expected to decrease further next year,” Al Mansouri said.