Azerbaijan 2017. Vehicles market recovered 42%

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Hyundai-i30-2017

Azerbaijan Vehicles Market recovered 42% after the previous year record fall. The economy expanded only marginally but the currency value stabilized and several brands recovered. The market has now been “invaded” by Chinese brands.

Economic Environment

While Azerbaijan’s economy expanded marginally in 2017 following a sizeable contraction in the previous year, it is too early to tell whether the economy is out of the woods yet. However, recent data seems to suggest that growth is on a firmer footing. In January, the economy grew 2.0% over the same month last year, chiefly driven by the non-oil sector, as the economy excluding that sector grew 3.9% year-on-year in the same month.

Market Trend

The introduction of new rules regarding the import of pre-owned and new vehicles has fast transformed the domestic industry in these years. Indeed, while the market was opened to import of any type of vehicles and the 90% of import was focus on used vehicles, with a huge number of almost old premium brands imported from Russia and Europe, the recent approach is to limit the import and sustain the opportunity to create a national automotive industry.

The economic crisis caused by the fall of oil price in the international market, created a sharp decline in consumer spending power with contraction of consumer goods purchase, including vehicles. The sector decline was also enhanced by the introduction of severe limits to the age and the emission level for imported vehicles, hit the market in recent years and total volume declined sharply with 2016 at a negative peak in over 10 years and just 4.268 sales.

In the 2017, the recovery of consumer demand allowed to the vehicles market to recover, with light vehicles sales up 42% at 6.071 units.

At brand wise, the competitive landscape is rapidly changing with the three traditional leaders – Hyundai, Kia and Toyota – leaving spaces to brands favorite by lower import duties, like Lada, Ravon and Chinese brands. In the 2017 the market leader was Hyundai with 1.190 sales (+109.6%) followed by Kia with 750 (+47.8%).