Georgian auto market collapsed because of restrictions imposed by Azerbaijan

Tbilisi/06/06/14/Turan-BS PRESS: Restrictions on the importation of cars older than 2005 release imposed by Azerbaijan and the impending increase in duties in Armenia jeopardize business of the Georgian car dealers, said the radio station Echo of the Caucasus.

Azerbaijan has imposed restrictions on the import of vehicles older than eight years, from April 1, 2014. Car Dealers in Georgia expect increase in duties on imported cars in Armenia, in connection with its entry into the Customs Union.

"After Azerbaijan imposed restrictions we cannot sell any car. Under kick are put the interests of more than 20,000 people and their families who have invested all their savings in the business," said an auto dealer Mindia Zakareshvili.

According to the radio over the past years Azerbaijan has been a major market for cars imported into Georgia from Europe and the USA. For example, Azerbaijan imported tens of thousands of cars in 2013, and only 2,500 cars this year.

"Last year, Georgia exported to Armenia about 17 thousand cars. However, after Armenia's accession to the Customs Union the amount of customs duties on a middle class car will reach 14 thousand dollars. This will put an end to the re-export of vehicles in Armenia," said the head of the Automobile Federation of Georgia Shalva Ogbaidze

This is not the first blow to the Georgian re-export cars in its history. In 2009, a similar situation existed with Kazakhstan. This country imported 20 thousand cars a year, but after the accession to the Customs Union Kazakhstan import of cars from Georgia fell to zero.

Meanwhile, the Georgian government has taken so far only one measure of mitigation for car dealers: they are introduced a 45-day grace period for payment of customs duties.

The Rustavi car market, 11 km from Tbilisi, is the largest by area in the Caucasus. Its area is 250,000 square meters. It is located along the main road connecting Georgia with Armenia and Azerbaijan.

Cars have been one of the main items of imports and exports in the foreign trade turnover of Georgia for many years. In 2013 Georgia imported cars in the amount of 710.5 million U.S. dollars, accounting for 9% of total imports. At the same time, Georgia exported cars to the amount of 703.9 million, 24.2% of total exports, reported in the Department of Statistics.

In 2013 from Georgia to Azerbaijan cars were exported to the amount of 401.1 million dollars, more than half of all Georgian exports (710.2 million dollars).

In January-April 2014 from Georgia to Azerbaijan cars were exported to the amount of only 97,694,000 dollars. -02D-