Cars Market In Lebanon

It is true that Lebanon is a very small country, but the car market in Lebanon is somehow enormous. In Lebanon, we have an oligopolistic market where there are a few sellers all of whom are highly sensitive to each other’s pricing and marketing strategies. The moment one company sets a low price, or follows some sort of a good strategy, all the others do the same. Moreover, it is very difficult for a new company to enter this market.

When we talk about the concept of “buying a car”, we have to take in consideration:

_Who buys cars in Lebanon.

_Who sells cars in Lebanon.

_Where the cars are mostly sold.

_What the customer looks for in a car.

_What the dealers are making to satisfy their customers.

In addition to some other information…

After some readings and some interviews, we found

out that about 98% of Lebanese people would like to own a

car, and about 90% of them have cars, ( not necessarily

individually , it may belong to the father, to the mother,

meaning in the family and they can drive it whenever the

want). The 10% that do not have a car consist mainly of

people who live in small counties; where they have old

mentalities and old ways of thinking; somehow far from

civilization and technology. There are about 4 million

Lebanese people in Lebanon, and there are more than 2

million registered cars spread on all the Lebanese

territories, but mostly in Beirut, isn’t this a disaster?!

Even though the economical situation in Lebanon is going

down, but it seems that the personal consumption

expenditure will rise at an estimated 4% annual rate in the

3rd and 4th quarters of year 2000. Dealership showrooms

are busy and will deliver new vehicles. With consumer

confidence, less unemployment and real earnings on the

upswing, the future is bright for the automotive industry.

Car sales in year 2000 will be up. Sports utility vehicles are

the biggest sales gainer, up about 14% with almost every

manufacturer now offering a sports utility model.

Another faction of the local automotive business, the highly

competitive used car market, is revving up in Lebanon.

Local dealers say a quality supply of used cars is helping

bring in customers who may not be able to afford a new

car. "If there is any trend right now, it's an increase in the

used car market”. In recent years, savvy customers can

find these deals cheaper than payments for a new car.

What does the customer look for when buying a car?

• pricing:

The great news for consumers was “flat pricing” for

1998 models. Automakers have largely held the line

on prices for 1998 models. They were avoiding the

need to increase prices with gains in productivity,

rigid internal cost controls and working closely with

suppliers to hold down costs. When prices do rise,

buyers usually get more in standard features, like

power windows, upgraded audio equipment and anti-

lock brakes. In some cases, the 1998 models were

lower in prices than the 1997s. In addition, some

manufacturers have been offering rebates on 2000

models. Khoury co, for example, the dealers of

Chrysler in Lebanon, was exposing the new Neon

during Lebanon Motor Show 2000 with an attractive

price

Another major trend in the industry is the growth of

leasing. Leasing is attractive to consumers who like to own

a new vehicle every 2 or 3 years. It allows customers to

end their confusion about a certain car.

Franchised new car dealers have greatly enhanced their

ability to perform maintenance and minor repairs on a

“quick service” basis, ( in Lebanon, IZI CAR is now offering

this facility)

• Quality & brand name :

When it comes to the brand name and quality, the customer is affected by the word of mouth in addition to his expectations and perceptions.

• Power & safety :

The car’s power, in Lebanon and most of the other

countries, is a “young male” problem, they love speed and

always hope to be the fastest. The new engines being

introduced by auto makers have smaller displacements

geared for better horsepower and gas mileage. Today’s

engineering has made vehicles safer in accidents than ever

before. In all categories and weight classes, the industry is

building vehicles that are safer. In addition, new models

have features that appeal to youth. Auto makers want to

build brand loyalty in all age groups to generate repeat

sales. Although new product problems have been almost

eliminated, quality and warranties are better than ever to

keep new car purchasers happy with their vehicles.

Furthermore, some other features are considered, such as:

_ Fuel economy (but it is becoming important for

middle to lower class)

_ Environment (unfortunately, only few care about it)

_ Cargo space (according to age and gender)

_ After sale services (most people do care)

_ Dealer (not so important to the Lebanese)

In addition to all these features, demographic, geographic

and psycho-graphic factors also affects the consumer’s

buying behavior, such as:

_ Income

_ Level of education

_ Gender

_ Family size

_ Occupation

_ Place of living

Because of all these facts, each and every car dealer in

Lebanon try to be the first to offer the best facilities,

options and services to the customer’s demands. Therefor,

there is always this big competition between car dealers.

__ Some of the most known car dealers in

Lebanon:

• Those who have more than a brand:

Bassoul & Hneineh: BMW, RENAULT, ALFA ROMEO.

Saad & Trad: JAGUAR, DAIMLER, ROLLS ROYCE, BENTLEY,

FERRARI, FIAT.

Rassamni Youness: NISSAN, INFINITY, GMC.

Impex: CADILLAC, CHEVROLET, PORSHE, ISUZU.

F.A. Kettaneh: VOLKSWAGEN and AUDI.

Gemaco: TOYOTA and LEXUS.

• Some other dealers are responsible only for one brand:

T. Gargour and sons: MERCEDES.

Sarkis group: SAMSUNG.

Standard motors: DAEWOO.

Century motors: HYUNDAI.

Gabriel Abou Adal: VOLVO.

Techno cars: OPEL .

Natco: KIA.

And of course there are much more companies and much

more car brands.

Between some of the dealers we find some kind of

competitions; the moment that DAEWOO sets a low price,

HYUNDAI and KIA do the same, or when one of them

follows some strategy, the others hurry to do the same.

Also HONDA, NISSAN and TOYOTA compete among each

others.

On the other hand, even though MERCEDES and BMW are

both German cars and have almost the same quality,

safety and value, but the competition between them

seems to be slight or maybe it is not obvious to the people

especially in Lebanon. The fact is that each one of them

has its own customers who become loyal to their brand.

Also we must not forget JAGUAR who surely has its own

customers all around the world.

The most obvious strategies to promote are in

dealing with pricing. We always hear about some

companies reducing their prices a $1000 or even more

($3000 like AUDI in the mean time). Others offers extra-

options like (full insurance for two years, or fuel for free for

12 months…). Also companies follows different promoting

strategies “T.V adv., BILL boards adv., or by sponsoring

some important events…”

For example, MERCEDES and FERRARI don’t appear on TV

as a product for advertising, we may see them in some

movies showing their importance, also BMW is “James

Bond’s favorite”.

So these companies don’t have adv. For Lebanon like KIA,

HYUNDAI, DAEWOO…, they have international promoting

campaigns like the F1 (Formula one) racing with

MERCEDES & FERRARI, also BMW is working on entering

this field soon.

Everyone must have heard about “SAAD & TRAD” in

Lebanon. Established in 1995, SAAD & TRAD S.A.L., are one

of the leading companies in the automobile field, with such

prestigious makes as FIAT, JAGUAR, AND ROLLS ROYCE/

BENTLEY cars. in 1994, they acquired as well the FERRARI

and in 1998, they were appointed sole distributors of the

German MAN trucks. For twelve consecutive years they

dominated the Lebanese market with yearly sales figures

reaching more than 4000units for the FIAT only. They also

provide first class after-sales services in their up-to-date

workshop which covers an area of approx 3000sq.m.per

floor on three floors . They provide two year warranty for

FIAT cars, two years for the FERRARI and three years for

the JAGUAR and the ROLLS ROYCE/BENTLEY.

There’s a lot to talk about the new Jaguar S-TYPE, but

unfortunately, the dealer couldn’t give us so much

information, all he just said was: “sorry, I’d like to help but I

have an important meeting, you can take all you need from

brochures and from some employees if they can help”.

Therefor all we could know about JAGUAR was from the

brochure and from the net.

2000 Jaguar S-TYPE

The 2000 S-Type is a 4-door, 5-passenger

midsize luxury sport sedan available in

two trims, the 3.0 and the 4.0. Base prices

are around $42,500 and $48,000 for the

3.0 and 4.0, respectively. Among the S-

Type's closest competitors are the BMW 5

Series, Saab 9-5, Mercedes E-Class and

Infiniti Q45. The 3.0 is equipped with a

standard 3.0-liter, V6, 240-horsepower

engine that consumes 18-mpg in the city and

26-mpg on the highway. The 4.0 is equipped

with a standard 4.0-liter, V8,

281-horsepower engine that consumes 17-

mpg in the city and 23-mpg on the

highway. A manually interactive 5-speed

automatic transmission with overdrive is

standard on both trims. The styling for the S-

Type features a sporty, modern design

while retaining the characteristic Jaguar

elliptical vertical-bar grille and four-headlight

design. Technologically, the S-Type offers

several new features. Computer Active

Technology Suspension provides improved

handling and driver control and is offered

for the first time on any Jaguar model in

North America. The Voice-Activated Control

System is a first for the auto industry and

allows for operation of the climate control

system, audio system, and telephone

operation by voice command.