With over 1.3 million registered cars, plus thousands of unregistered vehicles as well as a significant number of Syrian cars, Lebanon’s roads are seriously congested, especially in Beirut. With no major developments planned, public transport is not going to cure this ill, nor is there likely to be any impetus for bicycle lanes to be put in place for people to huff and puff around the city carbon free. The solution for many has increasingly been scooters and motorbikes.
Yet despite the rising sales — estimated at around 500 a year — increased motorbike use is being hindered by the lack of implementation of a proposed traffic law that would enhance safety on the country’s notoriously anarchic roads, and secondly, by the fact bank loans for motorbikes are not as competitive as those for cars.
“For the near future there are no magical expectations, but the sector will grow slowly but surely, and we are getting more interest from people due to fuel prices, traffic and convenience,” says Negib Debs at Rymco Younes, dealership for Kawasaki and, as of September, Peugeot. “I think what is needed is for the older generation to understand that for younger people it is OK to have bikes, as the first barrier to owning a bike is often the family.”
But if the older generation tend to view bikers as reckless speedsters, they’re not alone. It is a view commonly held among the public in general, and it has to do with safety levels on the country’s roads. Dealerships such as ANB Holding, which sells KTM, Vespa, Aprilia, Moto Guzzi and Bajaj motorbikes, are improving road safety by offering courses and giving away helmets with bike purchases, while also working on setting up an importers association — the Lebanese Association of Motorcycle Agents — to have more sway at the government level.
CHANGING MINDS
“As the state doesn’t require it, we are offering courses like Advanced Riding Techniques. As a result, we’ve reduced accidents drastically,” says Nicholas Boukhater, CO-CEO of ANB Holding. “Mentalities are changing, and people are more excited about bikes.”
An issue for dealers is that imports of used bikes are not regulated — which would be required under the new traffic law — while used scooters are so cheap that riders often do not register them and if seized by the police, just buy another one.
“You can buy a scooter for $50, but that means your notion of transport is the wrong one. It starts from there. If the buying capability is upped to $1,000 via a bank loan, no matter how limited the income, you want to preserve the bike and not have it confiscated or break it. That’s when you care about your bike and how you ride. But the government is doing everything against us and for the benefit of the importers of used bikes,” says Marwan Tarraf, managing director of Bikers Inc, the dealership of Harley Davidson.
To get more people on motorbikes instead of in cars the traffic law needs to be passed, but with that unlikely anytime soon, one option to bolster sales and better regulate the sector is through bank financing for bikes. However, banks have not been as willing to lend at preferential rates as in the car sector, where rates can be as low as 1 percent through dealerships, and average around 3 percent from banks.
RISKY BUSINESS
“We still don’t have proper financing for bikes like [we do with]cars. Banks want a higher percentage as they say it is risky, but that can be covered by insurance. We are still pending a breakthrough,” says Debs. “Banks want around 6.5 percent and insurance is expensive. We faced this problem with the Peugeot bikes, which sell for $2,000 but the insurance premium is $600.”
Dealers such as Tarraf’s Bikers Inc have a more competitive arrangement: the “Harley loan” with Bank Audi at 5 percent interest, but that is attributable to the American bikes retailing at high prices — starting from $10,750 for the Sportster and all the way up to $60,000 — way above the purchasing power of the average commuter. “The whole banking system is not familiar with bikes and sees them as a risk,” says Tarraf. “Our plan is to decrease interest over the next four years.”
Nonetheless, sales of high-end bikes are holding up. Tarraf sold 105 bikes in 2010, 135 in 2011, 128 in 2012, and 135 new and 60 used this year, with the bestsellers the Sportster at 30 percent of sales and the Touring at 24 percent. Through a World Bank loan, Tarraf also supplied 100 Harleys to the Beirut police.
BMW motorbike sales have also surged. “We started selling motorbikes three years ago, and sold 15 the first year. This year we sold 55. The trend for bikes is up and demand is growing even though there’s a crisis. Next year we hope to sell 65 bikes,” says Nagy Heneine, general manager of Bassoul-Heneine.
Yet it is not just high-end bikes that are selling well. Sales of Peugeot have done well since being introduced this summer, while ANB recently acquired the import license for Indian-made Bajaj, with the aim of tapping into the sizable market for low cost bikes with good reliability.
“The Bajaj starts at $880 for a 150cc engine, and is the only bike at this price with a two year warranty,” says Boukhater. “With the testing playground India, which has excellent engineers and bad roads, the Bajaj is much better than Chinese brands.”
The potential is certainly there for motorbikes to become a more common sight on the roads, but as with car sales, much is dependent on the economic and security situation, which has so far played havoc with Harley Davidson’s plans to host one of six global events in Lebanon, which would be a boon for the motorbike sector overall.
“We had plans to host the Harley Davidson Middle East event in 2012, which is sponsored by the company. We had booked Ramlat El Baida [beach in Beirut] for four days and had bands coming from Europe. It would’ve been a motorcyclist’s heaven,” says Tarraf. “We threw a press conference with the Tourism Ministry, and expected to attract 45,000 people, but three days later the US issued safety warnings and the event was postponed to 2013, and now to 2014. We still want to do it but it’s not the right time.”
