Ministry of Commerce announces 10 immediate measures to address agents’ vehicle handover delay to consumers and subsequent rise in prices at auto showrooms

11 May 2022


Following the statement issued by the Ministry of Commerce on 14/9/1443 H corresponding to 15/4/2022, on the inquiry launched by the ministry in response to claims that auto agents sell new cars to auto resellers and car showrooms while delaying car handover to consumers;

Based on the ministry's role and responsibilities for consumer protection, trade development, supervision of local markets, protection from improper practices, and review of ways of doing business; after monitoring and investigating consumer complaints, it became evident that there are large lists of reservations in addition to high prices for some types of cars and delays in vehicle handover to consumers. In light of current global events and the effects of the corona pandemic on the global automotive market, as well as the reduction in the number of cars exported from factories to various countries around the world; and after consultation with the Ministry of Interior (represented by the General Directorate of Traffic) and the Zakat, Tax, and Customs Authority, as well as consultation with auto agents, the ministry has taken the following measures:

1:  The Ministry of Commerce has contacted automakers in an effort to increase the Kingdom's share of the cars on high demand in the Saudi market.

2:  Car agents prioritize individual clients and provide them with the most in-demand cars, while reducing the number of cars handed over to resellers and car showrooms.

3: Control distributors and auto showrooms to guarantee that there are no infractions or detrimental consumer practices in the sale of cars, that prices are not exorbitant, and that violators face penalties.

4:  Governance of car dealerships' booking lists, increasing transparency by providing consumers with reservation numbers linked to their ID numbers and accurately determining priority in the car booking lists, and requiring each agent to provide the ministry with a "weekly" report on the prices of high-demand cars, their quantities, the date of arrival, and the number of booking requests.

5:  Requiring car agents to publish on their websites prices, policies, instructions, and procedures for the mechanisms of (purchase, booking, listing, car handover, routine maintenance, channels of communication for receiving inquiries and complaints); and requiring agents to indicate their obligations and the consumer's obligations from the time of booking and purchasing the car until the sale and handover have been completed.

6:  Allow consumers to reserve one car of the same type throughout the current year for the most demanded vehicles until the booking lists are full.

7:  Stop car rental companies from selling new cars at high prices, and ensure that cars are purchased for the purpose of renting them to clients.

8:  Accelerate the implementation of an electronic link between the ministry, the Zakat, Tax and Customs Authority, the General Directorate of Traffic, and all car agencies and showrooms in order to trace the movement of sale of cars and monitor any illegal transactions or practices.

9: Forming a team of subject matter experts, with members from (Ministry of Interior, represented by the General Directorate of Traffic, the Ministry of Commerce, and the Zakat, Tax and Customs Authority). The team is in charge of following up on transactions and practices violating laws, as well as taking the required actions.

10:  Intensify inspection and monitoring activities, continue to follow-up on car agents, resellers, and auto showrooms in collaboration with the competent authorities, and impose penalties on entities that do not comply with the regulations and instructions applicable in the Kingdom, as well as curb practices that have a negative impact on consumers' rights.

The ministry emphasizes the importance of the consumer's role and awareness of his rights and duties, as well as his contribution in monitoring any commercial practices or violations and informing the ministry via the unified call center at (1900) or the App "Commercial Violations" on smart devices.

In collaboration with the General Authority for Competition, the ministry affirms that the laws and regulations prohibit any practices that violate competition, including any practices, agreements, or contracts, whether written or oral, express or implied, to reduce or increase the available quantities of products in order to control prices or create an unrealistic abundance or deficit. 

It also prohibits setting or suggesting pricing for goods and restricts the free movement of goods and services to marketplaces in order to disrupt competition. The penalties under the Competition Law are 10% of yearly sales, or 10 million riyals, or three times the profits made as a result of the breach.

Add comments

Change the CAPTCHA codeSpeak the CAPTCHA code
Last Modified 12 May 2022