Azerbaijan’s tougher car import laws have had a drastic effect on Georgian car exports.
The number of cars re-exported from Georgia to Azerbaijan halved in the first six months of 2014, in comparison to the same period of the previous year.
Three months ago Azerbaijan adopted strict car import rules, which stopped imports of cars manufactured in European Union (EU) before 2005.
In April Azerbaijan introduced the regulation to allow the country to only import cars that meet the Euro-4 ecological standard and were manufactured in the EU after 2005.
Azerbaijan was the top exporter of cars from Georgia.
Introduction of the law significantly restricted the cars which were allowed to be imported into Azerbaijan, including a large percentage from Georgia.
A transition from Euro-2 to Euro-4 was instigated by the President of Azerbaijan to intensify activities in the field of ecology.
As of April 1, only cars manufactured in the EU since 2005, United States since 2004, Japan and China since 2011, Korea since 2006 and Turkey since 2009, are allowed to be imported to Azerbaijan.
Information from the Georgian Government showed in the first six months of this year, the number of re-exported cars from Georgia to Azerbaijan decreased from 21,000 units to 13,000, compared to the same period of 2013.
Car dealers in Georgia say that not many in Azerbaijan could afford to purchase brand new cars. Photo by N.Alavidze/agenda.ge
Annual figures showed $703.9 million in used vehicles was exported from Georgia last year. Of this, the amount of exported cars to Azerbaijan composed $380 million, or 40,000 units.
Re-export of cars made up 25.7 percent of Georgia’s total exports in the first three months of 2013. On-selling cars topped the list of the highest demanded export commodities, at $318 million, an increase of 21.9 percent.
Meanwhile, higher duties on car imports may come into effect in Armenia as part of a Customs Union with Russia and Belarus, which is Georgia’s second largest market of exported cars.
As a result, exports of second-hand cars from Georgia to Armenia will also become a problem.
Georgia was heavily affected in 2011 when Kazakhstan became the first country to adopt strict rules to restrict car imports. When Kazakhstan joined the Customs Union in 2011, car re-export from Georgia to Kazakhstan stopped.