Reasons for the increase in car prices in Georgia

Over the past few years, the cost of cars has increased by at least 20 percent. Importers attribute this to Russian sanctions and the pandemic.

Irakli sold his first car in 2015 for $2,600. Two years later, he sold it for $1,000.

"In 2019, a 2019 Toyota Aqua model cost $4,000, now it costs $6,000. Any car that cost up to $10,000 before now costs between $1,500 and $2,000," Irakli says.

The export of cars started a few years ago, when a duty was imposed on the import of right-hand drive cars in accordance with Georgian legislation. It is known that Japanese cars cost from 1700 to 2000 dollars and were the most popular.

"The bazaar has completely switched to American cars. 99% of American cars are damaged, destroyed. To restore them, you have to bring spare parts from Asia, which has also increased the cost of transportation. Repairs have also become more expensive," says Paata Maisuradze, director of Yematos.

In 2020, car prices were expected to drop due to the pandemic, but the opposite actually happened.

"Right now, prices are still up 20 percent or more. There is demand, especially for hybrid and fuel-efficient cars," says Paata Maisuradze.

Iosif Rekhviashvili, manager of the marketing department at Kavkasskaya Auto Import Company, says that demand for production and delivery of new cars dropped to a minimum during the pandemic: "Companies started producing new cars, prices in America were lower, but still increased. But this does not apply to all models."

In Ukraine and Russia, the demand for cars that are unofficially imported from Russia has increased, for example, in Armenia, Kyrgyzstan, and Kazakhstan. We still observe this situation, but demand in neighboring countries has increased," says Iosif Rehviashvili.

According to the State Statistics Service of Georgia, cars worth $904 million were exported from Georgia in 2022, accounting for 16 percent of total exports. The statistics also show that 75,620 cars worth 75.62 million dollars were exported from Russia in 2022, 4 times more than last year.