Kuwait has a rich and relatively open economy with oil reserves of 104 billion barrels, 8% of world reserves. Oil accounts for almost 55% of gross domestic product, 94% of exports and 80% of government revenues. The country experienced rapid economic growth in recent years, but the decline in oil prices impeded the budget surplus in recent years. In 2014 Kuwait imported $ 29.9 billion, making it the 68th largest importer in the world. During the past five years imports of Kuwait have increased at an annualized rate of 1.4% from $ 27.5 Billion in 2009 to $ 29.7 billion in 2013. The most recent imports are led by cars , representing 13.2% of total imports from Kuwait, followed by gold, which represents 2.65% (Bennis, 1991).
The principal reason for the importation of cars is the relatively high purchasing power of Kuwaiti citizens and at the same time, lack of production capacities of vehicles. The United States, being the second largest car producer, is thus a natural source for car imports. Viewed from a global perspective, China and North America accounted for more than two-thirds of the total profits of car manufacturers in the last year. Data International Organization of Automobile Manufacturers OICA have previously shown that global vehicle production last year rose by 2.6% to 89.7 million, while the largest car maker last year was China, with more than 23.5 million vehicles. Second place was ranked the United States, behind which was followed by Japan, Germany and South Korea.
Due to a high purchasing power of Kuwait, the importation of cars is an important part of the economy. As a business however, the importation of cars from USA harbors several obstacles (Pedersen, 1991). People who are enchanted by the world of the American limousines, sports cars or large vans and pick-ups do not have a problem, in the internet age, to identify a car of their dreams with all the information on the manufacturer’s websites. There are several possibilities on how to import cars and this process can become a good business venture. First, one can create an intermediary – a company specialized in imports from the US and Canada. This company would get in touch with transporting agencies or specialized wholesale buyers on international level, and would resell cars that were already purchased in the USA. Then there is the possibility of making use of a transporting agent. This combination can save a portion of the funds, but at a price that is a formality of the purchase and commissioning. The third option is to do everything yourself, which means to purchase the car in the place of origin from the producer and transport it. This is probably the cheapest, yet the most risky way on how to get cars from USA to Kuwait. The import of cars from the USA is done by several specialized companies. In addition to import of the chosen cars these companies offer a range of additional services, from repairs, certification, handling of official formalities through the import of spare parts to insurance and assistance services. Services vary according to the contractual conditions of each company. Prices are also different, but not markedly. The transaction with such a company is as follows. According to the wish of each customer the company selects cars in dealer showrooms or order it directly from the manufacturer. In good companies, you can be sure that the car does not come from auctions of insurance companies where the cars are damaged, stolen and then found. One must be careful on American cars offered in car dealerships. Purchase of cars in bazaars might not be a recommendable strategy. As a rule, cars in bazaars do not have adequate mileage, they are after repairs and are not properly checked out in the US. Again, it pays to hire a good company, which gives the car an original TP and certificate of history from CARFAX. CARFAX issues certificates, which registers cards for more than 2.1 million vehicles and is responsible for the information that it buys from the damaged vehicle or any 5.000USD pay compensation if it is found that their information mystified buyer. Certificate history contains all the entries in the card of the vehicle, such as the first registration for the vehicle carried out, each transcript or emission control, register of every change of owner, crashes, floodings, airbag deployment, use of the car as a taxi, leasing, commercial, private, remodeling, removals from the register, quest event of theft, duplicates of technical certificate. Imports of cars from the USA should include information on the vehicle type (manufacturer, type, engines, paint, trim, accessories and more), the entire configuration of the car and a chart where you can clearly see from what items the final price of the car consists as well as photos being a part of the offer. After the sale, the customer will receive a proforma invoice to perform backups. Delivery times are for both new and used vehicles ordered by dealers estimated at five weeks, if the vehicle is ordered directly from the factory, it is still five weeks longer. This period varies from company to company. A common way of imports is shipping. Exceptionally, the car can be transported by air, but be aware that it will cost much more. The vehicles are transported by ships to ports in Kuwait. According to information provided by Denker Ltd. most imported cars are JEEP GRAND CHEROKEE, INFINITI FX35 to a lesser extent Lexus RX 330, FORD FORD EXCURSION NAVIGATOR and FORD MUSTANG as well as HUMMER H2 and Chevrolet Suburban. Imports of cars from the USA usually has already the full factory warranty (Hafeez, 2014). All vehicles that cross the ocean automatically lose their factory guarantee with some exceptions, eg. Porsche, which provides a global guarantee. So it is worth letting you import mediate with all the trimmings. Car insurance is solved then through a lease contract. Solid companies after the import of a car arrange all the necessary documents from customs clearance through the approval to the handover of the final copy of the technical certificate to the new owner. The vehicle registration is done by the customer himself.
- Bennis, P. (1991). Beyond the Storm: A Gulf Crisis Reader. Brooklyn, New York: Olive Branch Press.
- Hafeez, Z. (2014). Islamic Commercial Law and Economic Development. San Francisco, California: Heliographica
- Pedersen, P. (1990). Wage differentials between the public and the private sectors. Journal of Public Economics. 41, pp. 125-145.
