Azerbaijan. Lada leading the 2019 rank, while the market is recovering

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Hyundai-Ioniq-2020
Azerbaijan Vehicles

Azerbaijan Vehicles Market in 2019 has immediately recovered from the previous year’s drop. Indeed, Full-year registrations have been 7.615, soaring 73.7%. Lada went back on top – holding 18.6% of share – outpacing the former leader Hyundai by less than one hundred units.

 

Economic Environment

Azerbaijan’s economic growth strengthened somewhat in the third quarter, after slowing in the second quarter. The acceleration was led by a marked upturn in non-oil and gas activity, which more than offset softness in the energy sector in Q3. Household spending likely spearheaded the overall expansion, reflected by sturdier retail sales growth in the quarter amid a stronger increase in wages in July–August. Turning to the fourth quarter, economic activity cooled in October amid a sustained downturn in the oil and gas sector, boding poorly for growth at the quarter’s outset.

Growth is seen stable next year, supported by rising government spending and sturdier private consumption amid improving labor market conditions. Furthermore, looser monetary conditions and improving investor confidence bode well for investment activity growth. Volatile commodity prices and slowing global growth remain major risks to the outlook, however.

 

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 2018 registrations was hit again by a sharp drop (-27.8%) selling just 4.384.

In 2019 the market has immediately recovered from the previous year’s decline. Indeed, Full-year registrations have been 7.615, soaring 73.7%.

Lada – which after hitting a record of 42.6% in 2016 has halved its market share – went back on top of the ranking, holding 18.6% of share and outpacing Hyundai by less than one hundred units.

Meanwhile, Toyota gained the podium, outpacing Kia which has grown from 6.3% in 2010 to 11% of share.

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