Azerbaijan 2018. Auto sales hit down 27.7%

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Hyundai-Tucson-2019
Azerbaijan Vehicles

Azerbaijan Vehicles Market in the 2018 dropped back again (-27.7%) – after the previous year’s recovery – with 4.388 sales. Hyundai held the throne, ahead of Lada, while Kia reached the podium. Impressive performance scored by Renault, up 530%.

Economic Environment

Azerbaijan’s economy has grown in Q1 2019, thanks to increased petroleum production and improving non-oil activity. Industry was again the star performer, followed by the agricultural sector, which has benefited from a slew of reforms in recent years. Retail sales also gained pace, suggesting that household spending remained resilient; hikes in the minimum wage and minimum pension, enacted recently to appease growing public discontent over rising living costs, should further stoke private consumption.

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 focused 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.

However, in the 2018 the market was hit by a huge drop, closing the year with registrations at 4.388, down 27.8%.

In the competitive landscape, the market podium has changed again, with Hyundai leading with 1.012 sales (-15%), followed by Lada (+1%) and Kia (-42.8%). Remarkable performance was registered from Renault, booming 530% from the previous year, gaining 5 spots.

Market Outlook

After an extremely irregular period signed with large drops, the Azerbaijan’s market is seen to be slowly recovering during the 2019-2025 period of time.

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