{"id":24046,"date":"2012-12-17T05:24:27","date_gmt":"2012-12-17T01:24:27","guid":{"rendered":"https:\/\/mideastposts.com\/?p=24046"},"modified":"2012-12-17T05:24:34","modified_gmt":"2012-12-17T01:24:34","slug":"the-hybrid-car-bonanza-thats-swept-jordan","status":"publish","type":"post","link":"https:\/\/mideastposts.com\/middle-east-business\/middle-east-economics-analysis\/the-hybrid-car-bonanza-thats-swept-jordan\/","title":{"rendered":"The Hybrid Car ‘Bonanza’ That’s Swept Jordan"},"content":{"rendered":"

\"hybrid-cars\"<\/a><\/p>\n

Jamal Dawud is nervously waiting for a cargo ship to arrive at the Port of Aqaba. His Toyota Prius is scheduled to reach Jordan any day now. Dawud\u2019s brother shipped it from the United States to help Abed lower his gas consumption and save money on a new car purchase.<\/p>\n

But neither expected gas prices to soar as they have.<\/p>\n

Jordan\u2019s once subsidized fuel prices expired earlier this month, and caused fuel prices to increase by 12 percent to match the price on the global market. With the indefinite price increases on petrol, household gas, cab fares and more, some Jordanians are looking for a long-term solution for their daily transportation needs.<\/p>\n

In 2009, the Ministry of Environment initiated a tax reduction program on hybrid cars to stimulate local hybrid car sales. The full tax exemption on hybrid cars went defunct, only to be revived again three years later. This time, the government implemented a 75 percent tax reduction on small-engine hybrids.<\/p>\n

Dawud spent $8,000 on his 2010 Prius, and expects its total to come out to $16,000. Shipping cost him $1,700 and taxes will cost no more than $7,000.<\/p>\n

\u201cThe program is very beneficial for me,\u201d Dawud said. \u201cI\u2019ll only be spending half of what I used to on gas.\u201d<\/p>\n

But the program that had already once previously failed to achieve its environmental goals in 2009 may be hurting local dealerships\u2019 businesses this time around.<\/p>\n

With increasing awareness and shipping opportunities, more Jordanians have grown compelled to import hybrids from the U.S. instead of buying locally.<\/p>\n

According to the Jordan Customs Department, in 2010 over 14,000 hybrids were imported into Jordan.<\/p>\n

\u201cWhy spend more money when you don\u2019t have to?\u201d Dawud asked. \u201cIf I can import my own car for much cheaper than it\u2019s selling for here in Jordan, then I will.\u201d<\/p>\n

 <\/p>\n

Why it Began<\/strong><\/p>\n

In 2009, Jordan pledged to have 10 percent of its energy from renewable resources by 2020, as country leaders hoped its citizens would develop a greener conscience. So the Ministry of Environment launched the complete tax-exemption program for hybrid cars with environmental concerns in mind.<\/p>\n

Though Jordan\u2019s carbon footprint is relatively small, global warming remains a serious concern for the country. Because Jordan is the world\u2019s fourth poorest country in water resources, climate change could threaten to reduce water levels even more.<\/p>\n

The Toyota Prius emerged and gained popularity in Amman. In 2010, Central Trade and Auto Company, a Toyota dealer in Amman had a month-long waiting list to buy one of the six Priuses they received every month. \u00a0Over 5,000 Priuses were imported that year alone.<\/p>\n

\u201cPeople were slowly learning about them, but they liked the hybrids,\u201d Central Trade and Auto Company\u2019s Ikhlas Hatttar recalled.<\/p>\n

Business owner Maysa Al-Khatib purchased her Prius for $42,000 (JD 29,000) before many Jordanians had ever seen one.<\/p>\n

\u201cI liked the way it looked more than anything,\u201d Al-Khatib recalled. \u201cAnd I saved a lot of money by not paying taxes. It made more sense to buy this car and not pay more for the car or for the gas.\u201d<\/p>\n

But what started out as a promising program soon failed, as people took advantage of the ambiguous purpose of the program and cheaper car prices.<\/p>\n

 <\/p>\n

What went Wrong?<\/strong><\/p>\n

Larger more luxurious hybrids arrived to the Amman scene. Hybrid Cadillac Escalades, Lexus RXs, and GMC Yukons appeared in market. Sports Utility Vehicles have long been a popular choice among Arabs, and the larger hybrids began to contradict the environmental message Jordan was conveying.<\/p>\n

Dealerships also struggled to sell their pricier cars to make room for the hybrids, so their orders for hybrids were denied as consumer requests piled in. With a lack of supply in the market, the program couldn\u2019t succeed.<\/p>\n

\u201cIf there is a regular Camry and a Camry hybrid, many people will want the hybrid,\u201d Hattar said. \u00a0\u201cIt is cheaper than the other cars on the lot.\u201d<\/p>\n

At Central Trade and Auto Company, the 2013 Hybrid Camry runs for $56,000 (JD39,000) while the standard Camry sells for $60,000 (JD42,000).<\/p>\n

But what proved to be most damaging to the dealership industry was the amount of hybrids coming into Muntika alHurra, Jordan\u2019s Free Zone, from outside countries.<\/p>\n

\u201cThis is what is really hurting the businesses now, \u201c Hattar said. \u201cMany people know they can find these cars in Zarqa for a much cheaper price. They are used cars, but their cheap prices encourage people to buy from there.\u201d<\/p>\n

 <\/p>\n

Meet the Competition<\/strong><\/p>\n

Zarqa, a smaller city outside of Jordan\u2019s capital, has a free zone that was established to promote transit trade without having to pay the usual fees and taxes. Products arriving in the Free Zone are treated like goods outside of Jordan. Hybrids have been coming in rapidly.<\/p>\n

Hani Nashwan works at Zarqa Free Zone, selling cars at a discounted price. He doesn\u2019t sell anything older than a 2007 model, complying with this year\u2019s law that places a five-year age limit on imported automobiles.<\/p>\n

\u201cThe customs are low,\u201d Nashwan said. \u201cSince August of this year, we have sold 704 hybrids.\u201d<\/p>\n

Currently, a 2010 fully loaded Prius will cost a Jordanian buyer about $26,000 (JD18,000) which is still much more expensive than Dawud\u2019s personally imported car for $16,000. In a country where it is quote common to sell goods in dinars for their dollar price, used car dealers are profiting thousands as they manage to be the cheapest local option.<\/p>\n

Roughly 65 percent of Zarqa Free Zone\u2019s hybrid cars are imported from the United States, while the rest are from Europe and surrounding areas.<\/p>\n

Most of the cars are used, but in decent condition, as they must conform to customs and importing policies. \u00a0Yet many of the cars are bought for a fraction of their worth at U.S. used car auctions, and hold salvaged titles. Once repaired, they are sold for thousands more than they were purchased.<\/p>\n

\u201cThe government is selective towards what kind of cars we are importing, so we mostly have cars with minor hits,\u201d Nashwan said of his business. \u201cPeople would much rather buy them from us than spend more.\u201d<\/p>\n

With so many uninformed potential hybrid buyers in Jordan, the chances of them looking into a car\u2019s history is slim.<\/p>\n

\u201cA buyer can find out everything about the car they want to purchase,\u201d Dawud said. \u201cDo they check? I would say no.\u201d<\/p>\n

Nashwan\u2019s business sells car parts for hybrids, but in a country where hybrids are relatively new, repairs are costly and often go unfixed. Anticipating this, Dawud repaired his damaged Prius in the U.S. before having it shipped out.<\/p>\n

As he waits for its arrival this week, he considers asking his brother to purchase more Priuses from a U.S. auction and selling them in Jordan before his window of opportunity closes.<\/p>\n

The government has not announced if or when they will be ending the tax-reduction program. As it becomes more apparent that dealerships stand to gain little, some speculate its end is near.<\/p>\n

\u201cIf everybody likes them here, maybe I can make some money,\u201d he said with a smile. \u201cI know most Jordanians won\u2019t pay more at a dealer. Maybe they can come to me.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

SAWSAN MORRAR: A programme introduced by the Jordanian government has had a huge effect in pushing the hybrid car industry in the country. <\/p>\n","protected":false},"author":451,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,148,1594],"tags":[295,9602,211,18342,470,18305,3749,8251,6019,18302],"_links":{"self":[{"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/posts\/24046"}],"collection":[{"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/users\/451"}],"replies":[{"embeddable":true,"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/comments?post=24046"}],"version-history":[{"count":0,"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/posts\/24046\/revisions"}],"wp:attachment":[{"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/media?parent=24046"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/categories?post=24046"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/tags?post=24046"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}