The FINANCIAL — Georgian auto dealers have ended the first half of 2016 with over 15% of sales drop. With 7, 220 units, Mercedes-Benz is the bestselling auto brand in Georgia during current year. It is followed by Japanese Toyota, German Opel, Nissan and BMW, each counting more than 2,000. The current year has been another difficult year for auto dealers, as re-export has dropped by over 31%.
In total, 38, 526 units of vehicles (worth USD 219, 139, 000) were imported to Georgia from January-June 2016. The number was 46, 167 (or USD 258, 760, 710) during the same period of the previous year. Annual data comparison has shown over 15% decrease.
Mercedes-Benz was the top imported vehicle in Georgia for the first half of 2016. The number reached 7,220 units, worth USD 42,019, 036. It was followed by Toyota – 2, 913 units worth USD 31, 441, 515; Opel – 2, 891 or USD 5, 532, 167; Nissan – 2, 403 units worth USD 8, 042, 542.2 and BMW – 2, 334 units worth USD 18, 530, 505.
The current year has shown insignificant sales drop for AKA Gmbh Mercedes-Benz Georgia. The company sold 112 units during January-July 2016, down from 117 units from the same period of the previous year. Mercedes S Class, GLE, GLA have been the bestselling brands of the company this year. The prices of these models vary from EUR 140, 000 to EUR 40,000.
“I would distinguish February as the bestselling month in our company. It is because the new models of the year are mostly imported that time. Another active month is November. The demand mostly grows for off-road vehicles,” Salome Gabelia, Sales Manager at AKA Gmbh Mercedes-Benz Georgia, told The FINANCIAL.
According to Gabelia, the company expects to end 2016 with over 5-10% sales growth, in comparison with the prior-year. “In 2016 Mercedes has introduced lots of new models. The majority of them will be offered to our Georgian customers from September,” she added.
At the beginning of the second half of the year, Mercedes-Benz sold 163,770 vehicles to customers worldwide in July (+9.4%), a new all-time high. In all three core regions – Europe, Asia-Pacific and NAFTA – Mercedes-Benz increased its unit sales compared with the prior-year month. Contributions also came from the new E-Class Saloon and the dream cars of Mercedes-Benz.
After the best first half year in the company’s history, Mercedes-Benz has started the third quarter very successfully. In July, 163,770 Mercedes-Benz vehicles were handed over to customers all over the world, an increase of 9.4%. Sales in the first seven months of the year rose to 1,170,389 units (+11.7%).
“The year of the E-Class and the dream cars has been progressing very successfully for us. The new E-Class Saloon is extremely popular with our customers. And we delivered around 12,000 of the dream cars to our customers in July. Our new models are strengthening the Mercedes-Benz brand while further rejuvenating the product range,” said Ola Källenius, Member of the Board of Management of Daimler AG responsible for Mercedes-Benz Cars Marketing and Sales.
While all auto brands have seen a reduction in import this year, there were only four exceptions. German Audi, American Ford, South Korean Hyundai and Italian Alfa Romeo have seen a slight increase in import this year, in comparison with the prior year. 858 units of Audi brand cars have been imported to Georgia this year, up from 450 units from January-June 2015. Import of Ford has amounted to 362 units with year, up from 289 from the previous year. Number of imported Hyundai brand cars has totaled 439 during the first half of 2016, up from 253 from the same period of the previous year. As for Alfa Romeo, the number reached 26 this year, up from 25 as of the first six months of 2015.
In his TV interview, Irakli Gurchiani, President at Toyota Center Tbilisi has distinguished 2007 as the bestselling year for his company. According to him, the company was selling over 35 units daily, however currently the number hardly reaches 30 units monthly. Dramatic fall of sales Gurchiani explained with economic stagnation.
Georgian auto dealers managed to re-export just 5, 692 units (worth USD 71,990,345) this year. The figure was 8, 230 units (valued at USD 95,193,000) in January-June 2015. With 3,184 units, Armenia remains the top country in terms of re-exported cars from Georgia. It is followed by Switzerland – 594 units and Russia – 514 units. Georgians managed to re-export 367 vehicles to Ukraine. Number of re-exported cars to the UAE has numbered 319.
Georgia’s re-export to neighbouring Armenia was 4,734 units during six months of last year, while Azerbaijan counted 2, 143 cars for that time. The two countries used to be the main target for Georgian auto dealers for a long time.
With 1, 655 units Mercedes-Benz has been the top re-exported vehicle from Georgia during the first six months of 2016. It is followed by Opel – 979; Audi – 604 units and Toyota – 523.
The dramatic reduction of automobile sales in Azerbaijan from Georgia started in 2014. The Azerbaijani Government has now banned the import of cars that use fuel of a standard below Euro-4, consequently the export from Georgia to Azerbaijan of vehicles produced before 2005 (which used to be in the highest demand) has completely stopped.
While the loss of the Azerbaijani market has resulted from the country’s will to enhance standards, in the case of Armenia the reason was its political will to join the Eurasian Customs Union.
In 2015 Armenia became a fully-fledged member of the Russian-led Eurasian Customs Union (ECU). Georgia, on the other hand, signed the Association Agreement (AA) and the Deep and Comprehensive Free Trade Area Agreement (DCFTA) with the European Union. New regional divergence, and two different choices that have been made in the same region, have impacted on the trade relations between the two countries.
In 2013 automobiles were the largest re-export product from Georgia to Armenia. Approximately USD 120.5 million worth of automobiles went to Armenia, comprising 38 percent of total exports from Georgia. The new tariffs have affected not only bilateral trade and auto-dealers, but also the interests of Armenian consumers.
The situation with car re-exports from Georgia to Kazakhstan developed similarly after the latter joined the ECU. However, export to Kazakhstan was mostly low, with a huge jump in 2011 and equally rapid drop in the next year, whereas car exports to Armenia were characterized by very steady growth since 2009. Thus, in the case of Armenia, Georgian auto dealers are losing a bigger market.