Dependence on cars

A substantial shortage in public transportation that has limited geographic coverage has characterized a Lebanese living style that is increasingly dependent on car use. Today, the fact that close to 900,000 cars serve a population of 3.7 million on a land the size of 10,452 km should be alarming.

Number of cars registered annually

A significant decrease in the number of registered cars has taken place over the last few years, with figures now putting the number of new and used cars registered for private use at half of the annual figure of 56,268 in 1994. Table 1 below illustrates the decline since 1994, which is mainly attributed to the following three reasons:

• The ratification of a law forbidding the import of cars older than eight years into the country.
• An increase in customs duties.
• A faltering economy whose effects have been felt since 1997.

Impact of the Value Added Tax

The introduction of the Value Added Tax (VAT) in February 2002 has significantly affected the market for new cars. Many consumers resorted to buying their cars before the law took effect, saving an average of $1,000 to - $3,000 per car in taxes.

In 2001, the number of new cars sold reached 12,470, among which 3,160 cars (equivalent to 25%) were sold in November and December 2001. This trend was accentuated by a peak in January 2002 when 2,436 cars were sold, followed by a substantial decline of 361 cars in February 2002, when the VAT took effect.
 

Table 2 presents the number of new cars sold between 2001 and 2002, illustrating the depressed market for new cars by 20% - 25% as compared to the previous year.

Best-selling cars

• The Nissan brand, distributed exclusively by the Rymco dealership, ranked first in terms of the number of cars sold, with 2016 cars in 2001 and 1,057 cars in the first half of 2002.

• Toyota vehicles came second with 822 cars sold in 2001 and 408 cars in the first half of 2002 (ranking fourth).

• The Renault brand, distributed by Bassoul & Hneine, ranked third as 796 cars were sold in 2001 with 411 sold in the first half of 2002 (ranking third).

• The Kettaneh dealership and agent for Volkswagen ranked fourth, selling 703 cars in 2001 and 264 cars in the first half of 2002 (ranking seventh).

• Peugeot cars ranked fifth with 694 cars in 2001 and 606 cars in the first half of 2002 (ranking second).

• Hyundai cars ranked sixth as 692 were sold in 2001 while 270 were sold in the first half of 2002 (also ranking sixth).

Significantly, the sale of luxury cars declined while vehicles in the price range of $10,000 - $20,000 made up the majority of sales.