Wednesday, December 2, 2009

A Tesla IPO?

There might be a market for some of those old Dubai cars; they had severe flooding in Jeddah, Saudi Arabia on Wednesday; at least 3000 cars were swept away in the flooding per this Saudi Gazette article. That is very surprising, since we usually think of Saudi Arabia as a desert, but even desert areas occasionally get rain; when they do, flooding often occurs.

What probably got this piece on my radar was the article quoting a ground vehicle transport company manager, who noted that business was essentially stopped in Jeddah.

That’s going to mean that about $60 million in cars will be heading to Jeddah if those cars need to be replaced. That’s a big chunk of change, especially if people are paying for replacement cars out-of-pocket, since there is no requirement for car insurance in Saudi Arabia; traditional Islamic thought leans against insurance as much as some corners of Christian thought do, assuming that God and society will help the folks in need.

You might see a few extra shiploads of cars heading towards Jeddah in the weeks to come, as many of those cars will have to be replaced. There will also be a big increase in parts for the damaged cars, as electrical systems have a tendency to get damaged in flooding.

Saudi Arabia is an interesting critter; they have a lot of modern development yet their nomadic Muslim roots make some corners of their society rather backward; the lack of insurance coverage points out one of many areas where they haven’t fully engaged western economic values.

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