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?
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:
_ Level of education
_ Family size
_ 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 .
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.