Oman Auto market in 2018 posted the 5th fall in a row with 127.546 sales (-13.9%) at the lowest level in this decade. The market suffer the reduced public investment and spending and the austerity measures aiming to support the fiscal budget, as oil price revenues fall. Outlook is still not positive
Economic Environment
Oman economy performed well in 2018 as higher average oil and gas prices, coupled with increased hydrocarbon output, translated into stronger public finances and export growth.
Government revenue climbed by over a third in the January–November period compared to the same period a year earlier, leading the fiscal deficit to fall by over 40%. Meanwhile, in January–September, merchandise exports also climbed by over a third year-on-year.
Increased output from the Khazzan-Makarem gas field, stronger fixed investment and the government’s push to strengthen non-hydrocarbon output should support overall economic growth this year. Nevertheless, the economy still faces large fiscal imbalances, weighing on prospects.
VAT Introduction
Back in June 2016, all six Gulf Cooperation Council (GCC) member states signed the Common VAT Agreement. It was agreed that each GCC Member State would introduce a VAT system at a rate of 5%.
In early 2018 Oman’s Ministry of Finance postponed the introduction date of the new VAT system, it is expected to be implemented in 2019. Oman’s Minister of Finance, Darwish bin Ismail al-Balushi, approved the introduction of VAT on March 28 via Ministerial Decision No. 64⁄2018.
A late September 2018 report in the Gulf Digital News (GDN) website stated that Oman would introduce VAT on September 1, 2019.
Market Trend
Omani vehicles market hit an impressive all-time record in the 2013 with 213.000 sales, following a ten years long rally, but losing fuel for further growth. In the 2014 it was stable before to start falling down, hit by several factors, including oil price decrease, cut of public investment and spending, introduction of austerity measures to support fiscal budget.
Finally, the introduction of VAT system, initially scheduled for January 2018 and then postponed, create more uncertain regarding vehicles value reducing the demand.
The final effect has been a 2018 market volume dropped at 127.546 units, down 13.9% from the previous year, at the lowest level in this decade.
The 2019 outlook is further not positive. While the market should show recovery in the first three-quarters, the VAT introduction in September should increase price moving the market again down in the Q4. And the current low-level of oil in the international market is not helping.
Brand-wise, the 2018 market leader was Toyota losing 14.4% and selling 61.777 vehicles, with market share at 48.4%. In second place Nissan, down 5.3% with 26.491 units, ahead of Hyundai with 7.439 (-32.7%) and Lexus with 5.636 (-8.3%).
Tables with sales figures
In the tables below we report sales for Top Brands
