Georgia’s car market has sharply slowed after a significant increase in vehicle customs taxes, with dealers and importers reporting dramatic declines in activity. According to Carmark Director Irakli Kukhianidze, the company’s sales have fallen by 65%, while individual dealers, once heavily involved in used-car imports, are now “practically stopped,” with a 90–95% reduction in operations.
Kukhianidze says confusion dominates the sector, as dealers no longer know which models or price segments are profitable under the new tax rules. The only segment that remains active is the import of so-called “dismantled cars,” where vehicles are cut into parts abroad and imported as scrap, significantly lowering customs fees and making the business more profitable.
The new tax structure has also changed consumer behavior. With mid-age cars now too expensive to import, buyers are turning to even older models—sometimes from 1995–96—to keep costs within budget. Cars from the 1990s offer much lower customs fees, making them an unexpected alternative for price-sensitive customers.
As of April 1, excise duty for cars aged 0–6 years is set at 1.5 GEL per cubic centimeter of engine volume, while vehicles older than six years are taxed at 4.5 GEL per cubic centimeter—drastically reshaping the market landscape.
