By Abdul Kerimkhanov
Armenia has seen the record high number for the imported cars. For the first quarter of 2019, the country imported as many as 35,000 cars, while 34,200 cars were imported in the entire 2014.
Such an unprecedented growth of cars on the Armenian roads will undoubtedly lead to an increase in the number of accidents. At the same time, roads and city streets are not adapted to such a high quantity of transport, their carrying capacity is limited, and there are no plans for significant expansion.
That is, the situation in this area becomes tense, and the Armenian authorities do not know how to solve the growing problem.
The current excitement in cars import is due to the fact that in accordance with agreements and commitments of Armenia within the Eurasian Economic Union (EAEU) framework, from January 2020, customs clearance of cars in Armenia will be carried out in accordance with the rates that apply to the EAEU countries.
Thus, starting next year, these rates for Armenia will be same as in other countries of the union. Taking into account this circumstance, the Armenian citizens decided to take advantage of the situation to the maximum and import as many cars as possible while customs clearance rates are low. Many get cars today to sell them in 2020 after the increase in customs duties will lead to an increase in prices in the car market.
Today, auto-importers of Armenia are at great risk of getting into a fiasco in their desire to purchase cars in advance, because now Armenia’s car market is oversaturated.
The only reason why the EAEU citizens buy cars in Armenia is lower prices thanks to the low pricing for customs clearance. However, from January 2020, this attractiveness of the Armenian car market will completely disappear. Prices will be the same, so citizens of other EAEU countries will stop going to Armenia to buy cars.
In this case, Armenians will have to rely only on domestic demand. Taking into account the oversaturation of the local car park, it is easy to assume that there will be a complete lull in the market. Therefore, those who invest in the automotive business in Armenia today, may incur decent losses later.
The possibility that Armenian people who decide to invest in this business may go bankrupt is not the only problem. In addition, Armenia is gradually turning into a car dump. In fact, cheap and low-quality cars are bought up wholesale and are retailed abroad. At the same time, there are no mechanisms for organizing the disposal of obsolete cars in the country.
Thus, the record figures for auto imports should be more than alarming for the Armenian government. Safety problems on the roads, problems of traffic congestion, as well as problems of utilization of old cars… this is not a complete list of the problems to which the Armenian government continues to close its eyes.
Abdul Kerimkhanov is AzerNews’ staff journalist, follow him on Twitter: @AbdulKerim94
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