Last year, the re-export of cars from Georgia set a new record by doubling. Despite the fact that the main buyers are neighboring states, according to experts, these cars also enter the Russian market.
In 2020, more than $900 million worth of cars were sold in Georgia, while the total value of cars imported into the country was $1.6 billion. This means that in one year, car imports increased by 73 percent, while exports doubled.
According to Grossstat, last year, passenger cars became the second largest export group of goods from Georgia and the first among imported commodity groups. The main directions of Georgian automobile exports were distributed as follows:
Azerbaijan has received $308.4 million, Armenia has received $144.7 million, Ukraine has received $119.8 million, Kazakhstan has received $104.4 million, and Russia has received $75.6 million. Kyrgyzstan closes the list with $ 71 million
Although Russia is in the top five, dealers admit that most of the cars entering the markets of Armenia, Kazakhstan and Kyrgyzstan are also sent to Russia, thanks to the low customs barriers.
Joseph Rehviashvili, head of marketing at Caucasus Auto Import, notes that zero-mileage cars are especially in demand among Russians, which has significantly affected their market value:
Georgia has become a regional hub where cars enter through ports. While Azerbaijan and Russia buy cars from Georgia for their domestic market, other countries, for obvious reasons, buy them for resale to Russia, where there is a certain shortage. This hype has triggered a sharp rise in prices in Georgia's domestic market, even though imported cars have not risen in price. If previously, before the conflict in Ukraine, a budget car of 2014 could be bought in Tbilisi for 5-6 thousand dollars, now the prices have jumped to 9-10 thousand dollars. A similar situation can be observed in car dealerships: before the war, a new Mercedes of the prestigious class could be purchased for $150,000, while now a year-old car of the same class is sold for $200,000 to $220,000. According to my estimates, the average price of cars in Georgia has increased by 35% in one year.
According to Yamato's managing partner, Paata Mysuradze, the hype after the new year has eased a bit, with imports stabilizing. The Georgian market, where economical hybrid cars are most in demand, is saturated. Today, the premium segment of cars is mainly directed to the foreign market.
It is no secret that most of the cars come to us from America, and up to 90% of them are damaged and repaired directly in Georgia. Spare parts, on the other hand, are mostly sourced from Southeast Asian countries, where the logistical mess caused by the COVID-19 pandemic has caused their cost to rise significantly. This, combined with local inflation, has led to a 20% increase in car prices. However, the saturation of the market leads to a gradual decline in prices, which contributes to a decline in demand at auctions in the United States. As far as I know, the cost of transportation is also gradually decreasing, so I believe that car prices will gradually approach what they were before the crisis
In 2022, the leaders among the countries-importers of cars to Georgia were the United States of America (with a sum of 833 million dollars), Japan (283 million dollars) and Germany (180 million dollars). These countries accounted for up to 90% of all car imports.
The re-export of cars has become an important source of revenue for the state: according to the State Treasury, in 2022 the budget of Georgia received 232,4 million lari from the taxation of cars, which became a record indicator.
