Lebanon’s Economy and Car Sector on Parallel Lines
Lebanon’s deteriorating economic situation has had an impact on the car industry, as is the case with all the sectors in the country. Rising interest rates due to a decrease in financing availability, coupled with increasing unemployment, have resulted in lower car sales despite highly attractive offers made by car agents. A market study conducted by Karrenn shows that sales in April 2019 amounted to 2,168 cars, compared to 2,539 cars in April 2018, a decrease of approximately 15%. February 2019 also witnessed a considerable 15.5% decrease in car sales compared to February 2018.
The Lebanese government has recently decreased customs duties on imported cars by 25%, in an attempt to encourage the automotive industry and help reduce prices for consumers. It has also approved a 2% tariff on all imported goods with the exception of environment-friendly cars, such as hybrid and electrical cars, as well as medicine. This again demonstrates the fact that electric and hybrid cars are destined to set the trend for the future of the car sector in Lebanon, like many other countries in the world. This, in turn, emphasizes the need for increasing the number of electric charging points across petrol stations in the country.
While the government and citizens are in a “wait and see” mode, pending the passing of the 2019 budget, consumer purchasing power and confidence continue to decline. It is no surprise that car dealers in Lebanon are experiencing tightening demand and a tendency for people to go for cars that are affordable, cheap and fuel-efficient. Demand for luxury cars has decreased immensely.