21.Jan .2021 14:30

Business Explains the Reasons of Vehicle Re-export Decline

Business Explains the Reasons of Vehicle Re-export Decline
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Geostat reports, that vehicle re-export from Georgia halved in 2020. The drop reaches 329 million USD. Re-export is 45% down comparing to 2019. The largest decrease is noted in the direction of cars among the 10 major commodity groups by exports, where the decrease is more than 348 million USD, it means a decrease of 31.4% compared to 2019.

As auto importers tell BM.GE, the decrease in export-import is not only related to the pandemic and the closure of borders. One of the main factors in the decline is the closure of the Armenian market. Armenia stopped importing cars from Georgia due to the increased customs tariffs by the Armenian government from 2020. Armenia was one of the leading countries in terms of car exports.

"The pandemic cannot be directly blamed in 45% drop of exports, we should take into account the Armenian factor, then the drop will be 10-15%. It is true that the borders are closed and car dealers are unable to arrive, but the market has shifted to remote mode. So 2020 was not a very bad year for the auto industry. The balance is maintained and sales are pretty good today. We think the car market will open on February 1 and sales will return to normal," said Alexander Vekua, sales director of Caucasus Autoimport.

According to him, Armenian market is partly replaced by new players, along with Azerbaijan and Ukraine, which raises optimistic expectations for the businesses.

"Georgia still maintains the function of a hub. Azerbaijan and Ukraine are still making purchases; moreover, Tajikistan, Kyrgyzstan, Kazakhstan are added, Iraq is in the statistics, and Poland also makes exports. These new markets give optimistic expectations. We think 2021 will be much productive, at least because new players have appeared on the market," Vekua said.