Lebanon’s car sector kept the pedal to the metal in 2010, estimated to be worth around $600 million. The 6.5 percent growth clocked in October maintained the momentum set two years ago when car sales surpassed all records to reach a new benchmark.
“The sector peaked in 2008 and sales have stayed there. It has been a good year all round,” said Fayez Rasamny, vice chairman of Rasamny Younis (Rymco), dealer for Nissan, GMC and Infiniti. “What is happening is the same pace in the number of cars sold, but the bottom line — our margins — have been less.”
As of October, 28,404 registered new vehicles had been sold in Lebanon, an increase of 6.5 percent on the 26,664 units sold over the same period in 2009, while 27,341 units were sold in 2008, according to the Association of Car Importers in Lebanon. These figures come after the sector’s turnaround, with sales this year representing a more than 40 percent increase on 2007’s total year-end figure of 20,082 registered vehicles sold.
Fuelling demand has been the country’s relatively stable political environment, economic growth, easier access to bank loans, the Beirut motor show and the increased availability of affordable compact cars. However, sales slid in September and October, with Lebanese consumers jittery as political instability once again threatened to rear its ugly head.
“The last two months have seen a slowdown due to concerns over the [Hariri] Tribunal. And the last two months of the year are always tough, so all dealers had to come up with offers to keep the momentum going,” said Farid Homsi, general manager of IMPEX, distributor for GM, Chevrolet, Cadillac, Hummer and Isuzu. “This eats up profits so you end up with thin margins but we had to do it as we have a certain level of inventory and have to make concessions. It is good for the consumer of course.”
While the sector grew overall in the number of units sold, 2010 was distinctly different from the past boon years when there was strong growth across the board for nearly all manufacturers. This year saw some brands soar while others limped along.
Two thousand and ten was undoubtedly South Korea’s year, with the country’s brands out-riding all competitors, up 84.21 percent on 2009 (when comparing the first 10 months of both years). Kia was the most popular brand in 2010, rising 88.41 percent with 5,432 units sold compared to 2,883 as of October 2009. Hyundai also powered forward in Lebanon in line with its global rise — sales are up 21 percent worldwide as of September, with sales in Lebanon surging 78.34 percent to 3,360 vehicles in the first 10 months of 2010.
Korean carmakers’ stratospheric rise was felt keenly by the competition: Chinese brands dropped 18.75 percent, Japanese brands fell by 12.91 percent, American brands by 13.22 percent and European brands by 4.72. It was a particularly bad year for Chrysler, which plummeted 83 percent, GMC (down 61.9 percent), Saab (down 71.88 percent), Peugeot (down 39 percent), and Jeep and Lexus (which both fell by 52 percent). Nissan, which was knocked off the top-selling spot by Kia this year, was down 16.58 percent with 4,703 vehicles sold.
“We’re down but by the end of the year we will pick up,” said Rasamny. “Two years ago the battle was between Nissan and Toyota, of the Tiida versus the Yaris, which was $2,000 cheaper than our model. We fought the battle and won.”
Now, the battle for sales is not between Japanese brands but with the Koreans. “It is Kia versus Nissan. But it is unfair competition as our cheapest car is $6,000 more,” added Rasamny.
Rymco plans to level the playing field next year when it introduces the Micra. “We are lucky that this successful model is coming now. We have never had a B segment model, so we’re really excited,” said Rasamny. “And we want to focus on small cars. We have to promote all models equally, but to market bigger cars is a harder task. As I don’t know the future, or what the country’s stability will be like, it is better to focus on smaller cars as they are also easier to liquidate [if something negative happens].”
Kia keeps on keepin’ on