Azerbaijan experiences automobile imports boom

25 February 2019 17:55 (UTC+04:00)

By Mirsaid Ibrahimzade

The growth of the welfare of Azerbaijani people and the development of the non-oil sector led to a sharp increase in imports of cars, trucks and buses into the country.

The automobile import boom that began in Azerbaijan last year continued this year too, despite a noticeable increase in excise taxes imposed on the imported vehicles.

Thus, in January 2019, 2,512 vehicles were imported into the country, which is 1,526 units, or 2.5 times more than in January 2018, according to the State Customs Committee of Azerbaijan.

From January 1, 2019, with the corresponding amendments to the Tax Code of Azerbaijan excise taxes on the import of cars were raised, depending on the engine size.

Thus, the excise tax on the import of cars with an engine capacity up to 2,000 cubic centimeters is 0.3 manats for each cubic centimeter, against previous 0.2 manats.

For vehicles with a large engine capacity, new excise taxes come as follows: up to 3000 cubic centimeters - 600 manats (previously 400 manats) plus five manats (previously three manats) for each cubic centimeter of engine (from 2001 to 3000) cubic centimeters of engine size and so on. That is, on average, excise rates imposed on imported cars increased by 50 percent.

But despite this, a noticeable increase in the income of a certain part of the population allowed to increase imports of passenger cars into the country in January this year by 1,359 units, or 2.5 times, thus reaching the amount of 2,267 units.

Also, the active development of the national economy and the opening of large factories in the non-oil sector led to a rise in truck demand. In January of this year, 215 trucks were supplied to Azerbaijan, which is three times more than in the same period of last year.

Improvement of the financial performance of the country also allowed begining actively update the bus fleet. In January alone, 18 buses were imported, which is 4.5 times more than in the same period of 2018.

And it is not surprising that, against this background, the expenses of entrepreneurs on the import of vehicles and spare parts for them have noticeably risen.

According to the results of 2018, 28,876 vehicles were imported from abroad. For imports of vehicles and spare parts $641.7 million were spent in 2018, which is $219.6 million, or 52 percent more compared to 2017.

Over the past years, the minimum import of passenger cars was observed in 2016 – 4,991 units. The maximum volume of imports of cars fell down in 2013.

Despite the high rate of car imports, Azerbaijan still takes steps to establish a car assembly to prevent currency outflows and meet the needs of the population and entrepreneurs in vehicles by establishing local plants.

Cars, trailers and semi-trailers were produced in the country worth 106.6 million manats according to the results of 2018, which is 31 times more compared to 2017, according to the State Statistics Committee.

As many as 969 cars were produced in 2018, which is 32.4 times more than in 2017.

Such a sharp increase in the production of cars in the country was achieved by a joint Azerbaijani-Iranian Khazar plant in the Neftchala industrial park.

By the way, starting from the current year, Khazar cars are expected to be exported, first of all to the Russian market.

In addition, the Nakhchivan facility opened in 2010 assembles eight models of Lifan passenger cars designed by China’s Lifan Group, which provides all the necessary spare parts for cars to the plant so they may be assembled in Azerbaijan under the direct supervision of the Chinese automotive specialists.

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