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Sat 22 Aug 2020 09:34 AM

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Lebanese car industry faces bleak future after port explosion

Importers of new cars in Lebanon incurred losses estimated at tens of millions of dollars, according to industry experts

Lebanese car industry faces bleak future after port explosion

Importers of new cars in Lebanon incurred losses estimated at tens of millions of dollars, as a result of the dramatic Beirut Port explosion on August 4.

The losses will lead to the closing down of a number of companies and showrooms, and will put hundreds of employees and workers out of work, according to the Association of Automobile Importers (AAI) in Lebanon.

The number of newly registered commercial and passenger cars registered slumped by 71 percent year-on-year (y-o-y) to 4,933 cars by July.

Taxes paid by the car importer companies to the State Treasury fell from $265 million in 2018 to around $33 million in 2020.

The AAI said it anticipated that a number of car distributors could close down and that car sales could further deteriorate in coming months.

The association stopped releasing its monthly data on car sales by brand, distributor and source country in January.

The market for new passenger cars in Lebanon has been facing increasing challenges in the past few years, including economic contraction, job insecurity, reduced purchasing power of consumers, as well as more stringent requirements for car loans.

In addition, the market has been affected by the measures that banks had to put in place since October, as well as by the outbreak of the coronavirus in the country and the related general mobilisation measures.

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