Oman. Despite postponing VAT introduction, the market signed the 6th annual fall in a row

Oman Auto market

Oman Auto market was negative in 2019 signing the sixth decline in a row. Indeed, Total sales in 2019 have been 111.608, down 12.5% and the government decision to move two years ahead the already scheduled VAT introduction did not sort the expected positive effect. Toyota held over 50% of market share, keeping a huge gap from Nissan and Hyundai.

Economic Environment

Economic growth slowed in 2019, as suggested by a year-on-year dip in oil production in January–November. Moreover, the non-oil economy remained subdued: Bank lending to the private sector remained downbeat through November, potentially dampening both private consumption and fixed investment.

In addition, government spending dropped slightly in January–November, while a sharper fall in revenues resulted in a small widening of the fiscal deficit. On the external side, although the merchandise trade surplus widened in January–September, this was due to imports dropping faster than exports. More positively, however, inflation was muted in January–November, boding well for private consumption.

Oman plans to introduce value-added tax in 2021. All six Gulf Arab states agreed to introduce 5% VAT in 2018 after that the slump in oil prices hit their revenues, but Oman, whose financial position is the weakest of the six, delayed the tax introduction, initially at September 2019 and now in the 2021.

Market Trend

Omani vehicles market was one of the fastest growing worldwide in the period 2003-2013 and at the end of a long series of annual all time record the market achieved the significant level of 213.000 sales in the 2013.

Unfortunately, the economic crisis created by the fall of oil price in the international market and the persistent low-level of this primary resource for the country economy, severely hit the demand for consumers good and the new vehicles market dropped down for the following 5 years, ending the 2018 at 127.546 units, near 40% below the record.

Despite postponing VAT introduction, the government has not been able to improve the economic trend and even in 2019 the new light vehicles market has lost terrain. Indeed, Total sales in 2019 have been 111.608, down 12.5%.

Toyota was the leader in Oman as in the rest of the region and in 2019 obtained a market share above 50% with a wide gap over the closer challengers which were Nissan and Hyundai, ending respectively with 16.3% and 5.6%.

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