The Association of Car Importers in Lebanon (denoted as AIA) recently shared its automotive report which explains that “As a result of the dramatic Beirut Port Explosion on 4/8/2020, the damages that importers of new cars incurred in their properties are estimated at tens of millions of dollars which will lead to the closing down of a number of companies and to the licensing of a large number of their employees and workers”
The market has been facing increasing challenges since past year, including economic contraction, reducing purchasing power of customers, as well as ceasing loans by the Lebanese banks. Moreover, the country went under strict lockdown in January after unprecedented spike in Coronavirus cases. As a result, the total number of newly registered cars sharply slumped by 93.63% year-on-year (y-o-y) to reach only 67 cars by January 2021 compared to the 1,051 registered cars in January 2020.
In details, passenger cars dropped by 93.77% yearly to 61. Similarly commercial cars declined by 91.67% during the same period to only 6 cars in January 2021.
In addition, the report also showcases the consequent drop in taxes paid by the Car Importing companies. The taxes fell from $265M in 2018 to less than $33M in 2020 paid to the State treasury.
Amidst this tragic situation, a glimmer of hope appears by launching Lebanon’s first locally manufactured electric vehicle on February 2021 by Electra Company. Proudly called “Rise” inspired by last year’s devastating explosion of Beirut’s port and aiming to open a wider market to environmental friendly driving options by being the first company in the Arab region to manufacture electric vehicles. However, it is not a matter of choice to have or not to have an electric car in Lebanon, especially considering the removal of subsidies on fuel very soon by the government.
Lastly, it is going to take time of course, but hopefully this launching will be the beginning of the end of this plague in car industry and be a reason to move the market and adjust to its trend.
It is worth mentioning that the AIA refrained from sharing detailed statistics on the sales of cars, but emphasized the above clarifications regarding the industry.
Growth of Registered Passengers Cars by January 2021
Source:AIA, BLOMINVEST bank