AZE.US
Azerbaijan has more cars on its roads than before, but new vehicles remain expensive for many buyers.
At first glance, a larger number of cars might suggest that prices should fall. More vehicles should mean more choice, more competition and more pressure on sellers. But the reality of Azerbaijan’s car market is more complicated.
The issue is not only the number of cars. It is also the age and condition of the country’s vehicle fleet.
Eyyub Aliyev, chairman of the Azerbaijan Automobile Dealers Association, told Demokrat.az that more than 80% of vehicles in the country are over 10 years old.
According to him, that creates several problems at once. Older cars require more repairs, place an additional burden on household budgets, cause greater environmental damage and create safety risks on the roads.
That means a large number of vehicles does not necessarily mean the market has enough modern, safe and efficient cars. On the contrary, Azerbaijan still needs to renew its vehicle fleet.
The country has a vehicle scrappage program under which owners can voluntarily hand over old cars and receive money or a voucher. The voucher can be used to buy a locally produced vehicle on more favorable terms.
Aliyev said fleet renewal cannot be completed in one or two years. It has to be a continuing process, because even new cars begin to age after several years.
Prices, meanwhile, do not depend only on official dealers. Customs costs, logistics, transportation, factory pricing policies and global market conditions all affect the final price paid by buyers.
Aliyev said some price reductions have been observed among official dealers over the past year. But a sharp fall in prices is unlikely, because too many cost factors remain in place.
Chinese brands are another important factor. Their presence in Azerbaijan’s market is growing, and that is already affecting competition, financing options, credit terms and leasing programs.
But the issue should be treated carefully. Imports of Chinese cars, local assembly projects, agreements with manufacturers and full-scale production are not the same thing. For buyers, the key question is still the final price, warranty, service network and financing conditions.
For Azerbaijan’s car market, the coming years are likely to be shaped by two parallel trends. The old vehicle fleet will need to be gradually renewed through scrappage and new purchases. At the same time, new cars will remain expensive because the underlying costs do not disappear simply because more vehicles are on the road.
That is why the growing number of cars in Azerbaijan does not automatically make the market cheaper. For ordinary buyers, the real question is whether new vehicles become more affordable, whether support programs work, and whether Chinese and other brands can increase competition in the lower and middle price segments.
AZE.US