Georgia’s auto business is under the threat of bankruptcy. Car dealers state that the major problem was caused by standards recently introduced by Azerbaijan, which prohibit the import of cars manufactured into their country before 2005.
Car dealers demand assistance
By Tatia Megeneishvili
Wednesday, July 2
The law went into force at the beginning of 2014. As far as the great portion of Georgian export was related to the re-export of cars from different countries to Armenia, Azerbaijan, Kazakhstan and others, dealers are now facing serious problems.
According to the dealers, they were damaged much through the regulation, since 70% of their cars were sold to Azerbaijan.
“First, it was Kazakhstan that withdrew from the list, then when Armenia entered the Customs Union with Russia, the re-export of cars in Armenia slowed-down and practically stopped. Azerbaijan, meanwhile, introduced Euro 4 standards that caused limitations. Serious problems are envisaged to be appearing on the Georgia market as well,” stated one of the dealers.
From 2015 the technical checking of automobiles will become mandatory. Analysts believe that out of around one million automobiles in Georgia, more than half will not meet the technical requirements. Therefore, the car business, either import, export or re-export, will slow down and of course will eventually decrease the number of employees in this business.
Meanwhile, according to dealers, prices have decreased by 30% on average.
According to dealers, Georgians only comprise 10% of their market. “If the trend continues, many of the currently active 32,000 car dealers will be out of business,” the dealer states. So far they are demanding from the Georgian government to work with neighboring countries and negotiate over the issue for those cars that have already been exported there to be sold.
Press speaker of Revenue Service (RS) Khatia Moistsrapishvili said that compared to last year car import has decreased by almost 50%.
“21, 000 cars were exported in 2013, then the number decreased to 13, 000. However, the number has increased in the case of Armenia, but the percent change is not high,” stated Moistsrapishvili.
Dealers speak about the high cost of the customs service. Official statistics also reveal that car import has decreased by 10% in the last year.
“The budget has huge income from us, now they must somehow help us,” said Joni Okruashvili, dealer.