AZE.US
Azerbaijan recorded a steep decline in passenger car imports in the first quarter of 2026, with analysts pointing to a mix of regulatory changes, tax pressure, and weaker demand as the main reasons behind the drop.
According to the figures cited in the report, the country imported 13,359 passenger cars in the first quarter, down by 7,587 units, or about 36%, from the same period last year. In the first quarter of 2025, the figure stood at 20,946 vehicles.
Market observers say one of the main reasons is the tightening of import conditions for older vehicles. Restrictions affecting cars older than 10 years have made that segment less accessible, while the expiration of tax exemptions has also raised costs for importers.
Another important factor is the end of the VAT exemption for imported passenger cars. Those vehicles are now subject to value-added tax again, increasing the final cost of bringing cars into the country.
At the same time, excise taxes on cars older than seven years have also risen depending on engine size, making imports of older vehicles even less attractive for both dealers and buyers.
Even so, industry representatives say the decline does not mean Azerbaijan is facing a car shortage. Eyub Aliyev, chairman of the Automobile Dealers Association, said there is no immediate reason for concern because dealers still have enough stock on hand.
He said a large number of vehicles had already been imported late last year, leaving inventories piled up at warehouses and dealerships. Those stocks are expected to be sold through by the end of the second quarter, after which import volumes could begin rising again.
Analysts also say the country’s vehicle scrappage process may support future demand for newer cars. As older and environmentally unsuitable vehicles leave circulation, they will have to be replaced.
That suggests the current fall in imports is less a sign of market weakness than a temporary adjustment driven by new tax rules, import restrictions, and the overhang of unsold inventory.