Futures in question as losses hit Lebanese car importers

The plunge

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Citing a 91 percent year-on-year drop in registration numbers of new motor vehicles in April 2020, member companies of the AIA Lebanon (Association des Importateurs d’Automobiles au Liban) fear widespread business closures that could lead to losses of about 10,000 direct jobs. Naming financial barriers, the AIA in a letter of alarm points to “impossibility of opening documentary credits” and “impossibility of converting cash” as major reasons for the precipitous contraction of new car sales but acknowledged in conversation with Executive the exacerbating impact that the coronavirus crisis had on existing uncertainties in multiply distressed Lebanon.  

AIA member companies, which over the past two years imported about 55,000 new cars representing about 60 European, Japanese, Korean, US, and Chinese automotive brands to Lebanon, had already  seem worrisome sales contractions for full-year 2019. As per the AIA’s December 2019 report, new car registrations in FY 2019 were down 33.4 percent to 21,991 vehicles when compared with 2018. Moreover, beyond the country’s internal crisis, the AIA importers are caught in what is shaping into a global tradeoff between digital and physical mobility as historic automobile manufacturers and car rental giants are entering a cycle of creative destruction (Nissan, France, Hertz). Thus, just one year after Lebanon’s automotive sector endeavored upon first steps toward more hybrid and electric mobility at the Beirut e-motor show in April 2019, this spring inundates the sector with signals that will not be ignored—signals of radical changes to the 20th century dream of individual vehicular freedom.   

Thomas Schellen

Thomas Schellen is Executive's editor-at-large. He has been reporting on Middle Eastern business and economy for over 20 years. Send mail

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