Motorbike and scooter sales have been on a gradual upward trend for the past five years. In 2015 these sales were set to increase marginally, reaching 1,500 to 1,600 units, according to estimates by the Lebanese Association of Motorcycle Agents (LAMA). However, this data is not conclusive, as the dealers still do not disclose their statistics on the total figures or breakdown of model sales.
Dealers had hoped to be able to push sales up a gear in 2015, expecting that improved traffic safety regulations under the new Lebanese traffic law would attract more buyers. In the past, the greater practicality of two-wheelers to circumvent traffic congestion had often proven insufficient for luring drivers from car seats to saddles, because the roads needed to become much safer to attract more riders.
Another reason for dealer optimism was the new law’s stricter regulations on imports, and prohibitions against bringing used motorbikes into the country. But while dealers confirm that the ban on importation of bikes that are more than three years old has been applied since the new traffic law went into effect in mid-April, they say the traffic safety improvements did not materialize despite an initial flurry of enforcement by police and safety authorities.
“I really pushed for the traffic law but it cannot be implemented if people are not educated about the rules,” says Marwan Tarraf, owner of Bikers Inc., the agent for Harley-Davidson.
Despite the benefits that the stricter import regulations bring dealers, there is concern about other stipulations in the traffic law. Dealers fear that the law does not allow for amendments, such as facilitating the importation of electric motorbikes, but are particularly worried about the implementation of restrictive regulations on motorbike riding.
Within months of the new law’s enactment, the Ministry of Interior and municipalities decreed that bikers in Beirut needed a waiver from their employer and local municipality to ride after 7 p.m. “This rule forbidding riders to drive after 7 p.m. has impacted sales. It makes no sense, and should be removed immediately,” says Nagy Heneine, general manager for Commercial Affairs at Bassoul-Heneine, dealer for BMW motorbikes.
While the government is trying to regulate riders driving after dark, well-known safety threats to two-wheelers are not being mitigated. Risks of motorcycle riding are not specific to Lebanon, as demonstrated by statistics from Britain’s Department of Transport that say motorcyclists are around 38 times more likely to be killed in a traffic accident per kilometer ridden than car occupants. However, safer and better-policed roads along with better training of traffic participants would help a great deal, says Antoine Boukather, chief executive officer and manager of ANB Holding, dealer for Piaggio, Aprilia, Motoguzzi, Vespa, Gilera, Derby, KTM and Bajaj. “Losing so many kids on the roads is a real pity. Law enforcement will definitely help reduce such issues. It is the mentality and education of people that needs to be worked on, which takes time,” he says.
Mixed sales
While safer roads would be a boost, sales have also been impacted by lower consumer purchasing power and a circular from the Banque du Liban (BDL), Lebanon’s central bank, which requires buyers to pay down 25 percent when purchasing a home or motor vehicle. While dealers have largely gotten around the mandated down payment by offering in-house financing, the financing of motorcycle purchases is still rife with obstacles. Banks have been found to be less willing to offer motorcycle loans when compared with their financing offers for cars, and insurers are not offering motorbike insurance that is as comprehensive as other motoring insurance. No-fault coverage of accidents and full protection against theft are not available from most insurers, motorcycle owners say.
Another barrier, and one of the biggest stumbling blocks for buyers of cheaper models, is the motorcycle registration fee. At about $200 irrespective of the bike’s size, the registration fee is disproportionately high for the entry-level and budget segments of the market. “There are many things crippling bike sales, but particularly registration fees, which are 20 percent of the price for cheaper bikes. That’s a heavy extra cost for someone paying, say, $2,000 for a bike, plus an extra $1,000 for insurance, a helmet and other riding gear,” says Makram Rasamny, a manager at Rymco, dealer for Kawasaki and Peugeot.
These high costs led to a growing phenomenon of under-registration, particularly for cheaper scooters and bikes that cost less than $500. “The only solution [to increase legal sales of] lower priced bikes is to reduce registration fees. This will also help better control the market, as right now many bikes are not registered and we don’t know who is riding,” says ANB’s Boukather.
Positive effects of alleviating extra costs have been demonstrated through marketing strategies put forward by dealers, such as offering free registration and a helmet for scooters. For Rymco, this contributed to a 60 percent increase in sales of Peugeot scooters. Their motorbike sales on the other hand rose by some 10 to 15 percent.
Bolstering the lower-end scooter and bike segment is considered key for the long-term development of the sector. New riders typically start out on a low powered bike, and then shift up to bigger engines over time. By offering attractive deals on lower-end bikes, despite the low margins, dealerships are banking on developing brand loyalty and visibility in the market.
ANB, which has 50 percent of the market, offers a range of bikes, and has expanded its lower-end offerings such as the Indian-made Bajaj, one of its bestsellers. “We’re investing in new brands from India, and scooters with 100cc and 110cc engines, with low prices, close to $1,000,” says Boukather.
Trends
While scooters and small engine bikes are selling well, Lebanese motorbike riders appear to be bucking the usual trend of starting with 250cc to 300cc bikes to learn on. “The weird thing is that small bikes are not selling much, with beginners going for 600-800cc bikes instead,” says Rasamny.
ANB Holding, which has seen sales rise by over 30 percent this year to 800 bikes, compared to 600 in 2014, has noticed more consumer behavioral change related to the country’s road conditions. “People are moving from superbikes (sports models with large engines above 800cc ridden in a reclining posture), which are not as practical in traffic, to naked bikes (a standard bike ridden in an upright position) with equivalent power. Another trend is to change from sports to adventure bikes as they’re more comfortable,” says Boukather.
For Harley-Davidson, bigger bikes are still the top seller, but sales are expected to be similar to 2014.
“We’ve seen some interest in new street models, the 750cc, probably because the price is more affordable. But the main interest that we’re noticing is bigger bikes for travel, mainly to Europe. The formalities for shipping bikes are expensive though, and if they were reduced would boost sales,” says Tarraf.
For Bassoul-Heneine, sales are restricted to high-end, more powerful BMW bikes, but the German make’s importer hopes that sales will spike, albeit from historically low numbers, with a new 300 cc model to be introduced to the market. “The market is growing quickly due to traffic congestion, with this year our best year, going from around 10 to 15 unit sales a year, to 19 in 2015,” says Heneine.
