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Many car rentals close before March 18 Saudization deadline

Saudi Arabia, March 6, 2018

Many car rental companies have closed business ahead of the March 18 Saudization deadline. Apparently not all offices have complied with the decision of the Ministry of Labor and Social Development while some closed their doors for fear of the hefty fines on businesses that do not abide by Saudization rule.

Abdulrahman Al-Ghamdi, an investor in rent-a-car sector, says the sector cannot pay high salaries to Saudis because business owners have to pay back the installments of the vehicles they bought and have to pay operational expenses including car service, gasoline, oil change, daily washing, annual rent of office and other expenses. His business does not generate the same lucrative profits it used to, besides it involves several risks as some vehicles might get damaged or destroyed in road accidents.

Fahd Al-Jabri, another investor in the sector, believes that the Saudization decision is a step in the right direction. 'It will benefit many Saudis and create job opportunities for them at monthly salary ranging between SR4,500-SR5,500.' Benefits also include one day and a half off weekly and a one-month annual vacation.

Ahmed Al-Harbi, an investor, also believes that many Saudis will reap the benefit of the decision once it is enforced. He believes that the Saudization of jobs in the sector will boost investors’ confidence in Saudi youth’s capabilities. The salary can reach SR3,700 for high school graduates and SR5,000 for college graduates.

Jalal Al-Ghamdi, former chairman of rent-a-car committee at Jeddah Chamber of Commerce and Industry, believes that it is difficult to implement Saudization decision in the sector due to several reasons. Some Saudis do not want to work two shifts or on weekends and holidays while the high season for rent-a-car business begins during weekends and holidays.

Most offices do not have an organizational structure that can help en employee get promoted and develop his skills. The system is rigid, he said.