While Lebanese people are experiencing their income shrink due to the huge devaluation of the national currency, the car sector in Lebanon is taking its last breath with the huge reduction of car sales, as Lebanese people are now prioritizing their expenses to only essential goods.
The Association of Car Importers in Lebanon (denoted as AIA) recently stated in its automotive report that “As a result of the dramatic Beirut Port Explosion on 4/8/2020 and due to the Covid-19 lockdown, the damages that importers of new cars incurred in their properties are estimated at tens of Million of Dollars. This will lead to the closing down of a number of companies and to the licensing of a large number of their employees and workers”.
More generally, the market has been facing increasing challenges in the last two years mainly resulting from a severe reduction in purchasing power of customers as well as ceasing loans from the Lebanese banks. As a result, passenger cars dropped by 54.95% yearly to 1,434 by May 2021.
In details, as of May 2021, European cars took the highest share of 30.33% of Total cars. Second, Japanese Cars estimated 27.27% of the total; with Suzuki and Toyota recording 8.79% and 9.00%. Moreover, Korean Cars came third, measuring 25.17% with KIA owning Lion’s share of 18.06% among them.
We don’t expect any rebound in this sector, even if the economic situation gets better, since the Lebanese behavior has changed amid this severe financial crisis, as they became more cautious about their spending habits.
Growth of Registered Passengers Cars by May 2021