Qatar re­tools after boy­cott by top Dubai auto parts sup­plier

Deal­ers say block­ade has taught them to be re­silient, open­ing up sup­ply lines with mak­ers

Business Daily (Kenya) - - MONEY & MARKETS GLOBAL - 80pc of their sup­plies pre­vi­ously came through Jebel Ali

In a dusty in­dus­trial zone in the south of Doha where the city’s auto re­pair shops are clus­tered, one un­lucky blue Hyundai Santa Fe has been sit­ting with its front smashed in since June 5, the day four Arab na­tions an­nounced a boy­cott of Qatar.

The SUV has fallen foul of the tiny State’s de­pen­dence on Jebel Ali in neigh­bor­ing Dubai, the first port of call for car com­pa­nies dis­tribut­ing spare parts across the re­gion but no longer an op­tion for Doha since its neigh­bors sev­ered ties. The United Arab Emi­rates, Egypt, Bahrain and Saudi Ara­bia ac­cused Qatar of sup­port­ing ter­ror­ism, which it de­nies.

With its tra­di­tional land, sea and air trade routes cut off, Doha has had to scram­ble to find new sup­pli­ers to re­place ev­ery­thing from Saudi Ara­bian milk to Emi­rati en­gine oil.

It also has had to quickly pull to­gether com­pli­cated new lo­gis­tics, in­volv­ing a mix of new air and mar­itime routes and use of nearby ports in Oman and Kuwait for re-ex­port. In many ways it has been a suc­cess. The boy­cott, which en­tered its sixth month this week, touches life on the streets only in mi­nor ways, with Turk­ish dairy and Ira­nian veg­eta­bles tak­ing the place of Arab food­stuffs on store shelves. Items are gen­er­ally avail­able and prices only mod­estly higher.

One ex­cep­tion has been auto parts, res­i­dents say.

In car-ob­sessed Qatar, where sta­tus sym­bol Bent­leys and BMWS zip down the Doha cor­niche at night, spare parts that once ar­rived in days from Dubai can now take weeks or even months, leav­ing ve­hi­cles lan­guish­ing in shops and driv­ers frus­trated.

A man­ager at one Amer­i­can au­to­mo­bile deal­er­ship in the in­dus­trial area, who asked not to be named, de­scribed the sit­u­a­tion as des­per­ate.

“You have cus­tomers com­ing in and scream­ing, say­ing ‘my car has been here two to three months.’ And you’re just help­less. What do you say?”

Although most im­ports have re­cov­ered to near pre- cri­sis lev­els after drop­ping sharply on the boy­cott, auto im­ports in Septem­ber were 40 per cent lower than their year-ear­lier level.

The man­ager said at­tempts to re-route orders from Jebel Ali to Oman and Kuwait for re-ex­port were aban­doned be­cause pay­ing two sets of cus­toms fees and ad­di­tional ship­ping spiked costs 20 to 40 per cent.

The sit­u­a­tion has im­proved in re­cent weeks after the deal­er­ship moved to im­port di­rectly by air from the United States, he said, but the process took months to set up.

“Un­til 10 days ago we didn’t have bat­ter­ies or oil. We were tak­ing bat­ter­ies out of the new cars.”

Some 58 per cent of im­ports to Qatar were ei­ther pro­duced in or shipped from the four boy­cotting coun­tries in 2016, ac­cord­ing to a Min­istry of De­vel­op­ment Plan­ning and Sta­tis­tics es­ti­mate.

How much of that is au­tos and auto parts was not pos­si­ble to de­ter­mine, but two parts busi­nesses in Doha said about 80 per cent of their sup­plies pre­vi­ously came through Jebel Ali.

The boy­cott has driven a cam­paign to make the coun­try less de­pen­dent on its Gulf Arab ri­vals even if the boy­cott ends.

Hun­dreds of cows have been flown in to scale up dairy farms that tra­di­tion­ally com­peted with Saudi Ara­bia, trade ties have in­creased with Tur­key and Iran, and a draft law was passed that would grant greater trade pro­tec­tion to lo­cal pro­duc­ers. The leg­is­la­tion is still pend­ing.

“No­body will buy from Dubai even if it opens up. Why would we let Dubai take any profit from us?” said a spare parts dealer whose goods are now sourced from Viet­nam and Korea.

At a high-end garage where a cream Porsche 911 Turbo awaited re­pair, the gen­eral man­ager said his shop has in re­cent months es­tab­lished di­rect im­port links with Euro­pean sup­pli­ers, cut­ting down av­er­age de­liv­ery time to about three weeks, about twice as long as be­fore the boy­cott.

No­body will buy from Dubai even if it opens up. Why would we let Dubai take any pro it from us ” SPARE PARTS DEALER |


AD­JUST­ING A gen­eral view of a shop­ping cen­tre in Doha, Qatar.

Newspapers in English

Newspapers from Kenya

© PressReader. All rights reserved.