The Association of Car Importers in Lebanon (denoted as AIA) recently shared its automotive report in which it explains that the industry is currently facing the “risk of closing companies of importers of new cars and fire around 10,000 employees and workers.”
In details, the number of newly registered “passenger” cars amounted to 3,998 cars in the first half of 2020, down from 13,176 cars in the same period last year. The report also showcases the consequent drop in taxes paid by the Car Importer companies. These fell from $265M and $178M in 2018 and 2019, respectively, to around $33M in 2020 paid to the State treasury.
The AIA attributed the subdued performance and risks of closures to bank procedures which halted the opening of Documentary Credits needed to the import of new cars or spare parts and rendered it impossible to convert cash collections in LBP to US dollars to pay suppliers. One could also mention the weak demand caused by a recessionary economy.
It is worthy to note that the AIA refrained from sharing detailed statistics on the sales of cars, but emphasized the above clarifications regarding the industry.
Source: AIA, BlomInvest Bank