Car prices to jump following new customs duties
By Sara Israfilbayova
Increase in customs duties on car imports since the beginning of this year will affect current prices in the car market.
Director of the Expert Property Center Ramil Osmanli told local media that new rules will lead to a rise in car prices by 20 percent, adding that increase in customs duties will reduce imports.
“This is a factor that directly leads to a narrowing of the offer and a rise in prices, while at the same time the duty will be calculated at 1.5 manats ($0.88) for each cubic centimeter of the engine, which is quite a high figure leading to an increase in prices for cars by at least 15-20 percent,” the expert stated.
Marketing manager of “Sirena Motors” (official representative of Chinese automobile brands) Eyyub Aliyev said that increase in customs duties will affect only cars that will be imported since February.
“Negotiations with the plants are currently underway. We are trying to get discounts on cars in order to avoid high premiums in addition to new duties. If earlier we bought a car for 18,000 manats ($10,500) and sold for 21,000 manats ($12,300), now we are trying to buy for 17,000 manats ($9,900) to sell at least for 21,500 manats ($12,600),” Aliyev noted.
In accordance with the “Nomenclature of Foreign Economic Activity of Azerbaijan, Import Rates of Customs Duties and Export Customs Duties” approved by the Cabinet of Ministers of Azerbaijan on November 17, 2017, since January 1, the customs duty for imported cars has increased by 70 percent on average.
Azerbaijan, currently working to develop its car manufacturing industry and encouraging interior purchases within the country, now is operating with different courtiers to develop its own automobile manufacturing market.
Currently, the country plans to produce cars jointly with Iran and will soon launch manufacture of cars in the Neftchala Industrial District. The plant will operate on the basis of joint project of AzEuroCar LLC and Iran’s largest car manufacturer Iran Khodro. The plant was due to open in June, but because of the cold winter there were delays in the plant's construction. The opening is rescheduled for August.
The plant with a capacity of about 10,000 cars per year initially will produce four Iranian car brands – Dena, Runna, Soren and Samand.
Production of some spare parts is planned in local factories. For this, proposals will be made to the plants and if the plants receive positive feedback from the Iranian company, then the production of spare parts will launch.
The plant intends to cooperate with the Sumgayit Industrial Park and SOCAR’s new plant. Some 20 percent of the vehicles will be exported to CIS and Central Asian countries.
Speaking about how the plant will get a share in the local market, Azeurocar’s representative said the plant will produce the cheapest cars.
“The price of new cars will be 10,000-12,000 manats ($5,800-7,000). The cars produced at the plant will meet Euro 5 standard”.
First cars of Azerbaijan-Iran joint car plant are planned to be manufactured beginning from 2018.
---
Follow us on Twitter @AzerNewsAz