Oman relies solely on imported vehicles. The country has witnessed a drop in vehicle registrations in the last couple of years due to the economic slowdown. However, growing population and tourist arrivals is likely to revive demand in the years ahead. Oman through its sovereign wealth fund has made over a couple of investments to develop local vehicle manufacturing landscape. Such investments are likely to strengthen the country‘s automobile sector going forward.
With the entry into force of the U.S.-Oman Free Trade Agreement in January 2009, bilateral trade in industrial and consumer products is duty free. Oman provided duty free access on virtually all products in its tariff schedule and has phased out tariffs on the remaining handful of products. Oman Bahrain Investment is developing Sandan City, a fully integrated industrial park outside of Muscat that aims to become a hub for the auto industry.
Summary
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Foreign companies wishing to distribute their products in Oman often prefer using a local agent, although since implementation of the FTA, American companies are no longer required to do so. Agents are particularly useful for sales to the Omani government due to their contacts, language ability, and cultural knowledge.
While Oman is an attractive market for a number of products and services, at times it can present challenges for American firms to do business. The following outstanding issues are of concern to U.S. companies: 1) Duties continuing to be charged on some American goods transshipped by road via Dubai despite the duty exemption advantage of the FTA, 2) Authenticated certificates of origin/shipping documents are at rare times still requested by Omani authorities despite not being required under the FTA, 3) Company registration can be slow, especially for consulting firms, and 4) Scarcity of natural gas feedstock for new projects.
Market Entry & Barriers
As the GCC markets move closer to maturity, competition is expected to intensify. This may mean pricing wars will drive transaction prices down. Far Eastern brands are on the rise. Purchase of cars in the GCC is relatively inexpensive compared to other countries globally although VAT (Value Added
The increase in prices of petrol amid a sluggish economic environment has negatively influenced the demand for vehicles and there has been a fall in the number of vehicle registrations in Oman. There has been a fall of 38.6 per cent in the number of vehicles registered in August 2018 compared to the same period of 2017.
Market Trends & Demand
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