Chinese cars grab a foothold in Lebanon – 2012 report
The Daily Star December 24, 2012:
The Daily Star (Beirut) – Chinese car makers are gaining a foothold in the Lebanese market despite the stigma, as economic conditions toughen and the majority of customers move to cheaper, more fuel-efficient cars, said general manager of Geely in an interview Friday.
“During the early days of the industry, it was American cars. Later, European cars made it to the spotlight, followed later by Japanese-made cars. Today Korean cars are leading the market,” Imad Ghorra said. “But the future is for Chinese cars.”
Re-launched in Lebanon only in June, Geely, a leading manufacturer of Chinese cars, has already gained a 0.64 percent share in the highly competitive market.
The first 10 months of 2012 saw Chinese cars posting the highest growth in sales, up by 140 units to reach a total of 350, a modest number of cars but still a 66 percent rise year-on-year.
But market share is expected to expand exponentially, Ghorra said, explaining that a recent takeover of Swedish automobile manufacturer Volvo will boost Geely’s cars performance, as technology transfers between the two companies deepens.
In 2010, Geely acquired 100 percent of Volvo from Ford.
The biggest challenge for Geely in Lebanon, Ghorra added, was customers’ association of Chinese-made products with low-priced light industrial products.
“But we have started to change that conception through test drives, extensive warranties, and very competitive pricing for both cars and maintenance,” he said.
Currently Geely models sell at 20 to 30 percent less than Korean counterparts, he added with on-road prices starting from below $10,000.
Geely has already banked on the Volvo acquisition to improve safety and car metal alloys to achieve a China Automotive Technology and Research Center score of (45.3).
Ghorra positive expectations for the company came in spite of the Lebanese new car market being highly affected by the current economic downturn.
“Over 90 percent of new cars being sold are those below 1.4 liter engine. This is what people can afford right now,” he said, adding that this has a significant impact on dealers’ profitability.
Small cars have just between $300 to $400 in profit margin, dipping further at times of tight competition.
Figures released by the Association of Automobile Importers indicate that the number of cars sold in the first 10 months of 2012 increased of 6.3 percent from the same period last year and a rise.
Entering the automobile industry in 1997, Geely assets grew to over $5.35 billion.
It operates three technical universities in China and has acquired the second largest automatic transmission manufacturing in Australia.
Geely has four showrooms in Lebanon, located in Jal al-Dib, Aley, Jbeil and Anjar as well as an after-sales service center in Jdeideh. Two additional showrooms will be operational by early 2013, Ghorra said.
“No customer is simplistic today. People now can know the difference between a good-quality car and a bad one. Those test driving our cars are not only buying them, they are even recommending them to other people,” he said.