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 last year, including suffocating economic conditions, less purchasing power of customers, as well as the ceasing of loans from Lebanese banks. In details, passenger cars dropped by 75.51% yearly to reach 574 cars by March 2021. Similarly, commercial cars declined by 63.76% during the same period to a total of 54 cars by March 2021.
The losses incurred following the Port explosion and Lira devaluation led to the closing down of a number of companies and showrooms. The car sector witnessed low demand as the Lebanese purchasing power drastically deteriorated, thus pushing car purchases out of their priorities. Moreover, the shortage in foreign currency liquidity and stringent cash withdrawal restrictions, suppressed the cars market, especially since many companies prefer having the first payment in US Dollar cash. The implications for the car industry are momentous, especially that close to “10 thousand families rely on the sector for their livelihood”.
It is worth mentioning that the AIA refrained from sharing detailed statistics on the sales of cars, but emphasized the above conditions regarding the industry.
Growth of Registered Passengers Cars by March 2021