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New Regulations in Azerbaijan Reduced Export of Cars from Georgia by 50%

New regulations imposed by the government of Azerbaijan reduced re-export of cars from Georgiaby half and many companies had to  left the market.

According to Sakstat preliminary data, in January-August 2014, 13 790 vehicles were sold inAzerbaijan, that is 50% less than in the same period of 2013.

In monetary terms, exports amounted to USD 182 million, which is 22.8% less than in the same period of 2013.

Azerbaijan is the second largest trade partner of Georgia, and 48/2% of Georgian exports fall on cars to this country.

In January-August 2014 exports from Georgia to Azerbaijan amounted to USD  378. 1 million that  is 19. 2% less than in the same period of 2013.

According to Director of the export trading company “Zario Auto” Ioseph Zarandia, after the introduction of new regulations,  exports of Japanese cars to Azerbaijan have virtually stopped, and basically dealers switched to American cars.

“Previously, Japanese cars took a very large share of exports to Azerbaijan, and now preference is given to American vehicles produced in 2005. Exports fell in July. Of course, we cannot say that Azerbaijan, as a country importing cars, is  completely, but the number of cheap cars that could be bought in Georgia is reduced and expensive cars can be purchased in showrooms in Azerbaijan. It was very profitable to sell Japanese cars, as they have always been of high quality, in very good condition, with low mileage, andthe  Azeris bought them with great pleasure. If you look at our company’s structure of exports of cars, 60-65% of the cars were Japanese, 35-40% – American “- said the dealer.

According to him, due to the current situation in the market, many dealers have ceased operations.

In his words, Azerbaijan has a high level of corruption, but corruption has not been registered in the compliance with the new regulations – for example, when the age of the vehicle is changed when crossing the border.

He notes that  the American cars are  on average 30% more expensive than the Japanese – if the Japanese car is worth  USD 5 000, the American – costs USD 7 000.

According to him, at this stage, a way out of the situation is not seen, but eventually, when the price of cars produced after  2005 drops in price, the situation will gradually improve.

As you know, the Azerbaijani government has banned the import of cars that use fuel standard below Euro-4, respectively, exports of vehicles produced before 2005 have   completely stopped from Georgia to Azerbaijan which were in the highest  demand.