> it can be sold to rich Arabs
Sure, and this is the only potential development of the flying cars I can see now. But these rich Arabs already can just buy planes, helicopters and sport cars separately so why bother with having another one?
>they can drop the price significantly
This thing still has to be stuffed with avionics and such. The planes are expensive not just because they are called planes.
And if it follows a convertible design like this AirCar than it also has much more moving components than both plane and car so more potential stress and weak points, all of this also adds to the price (both building and maintenance).
> areas of low population density in the West of the country
I really doubt they fit the "is economically developed" criteria...