BAKU, Azerbaijan, March 29
Tamilla Mammadova – Trend:
The weighted average age of passenger cars registered in Georgia was 8 years in 2020 (7.5 in 2019), Trend reports via the Georgian investment company Galt & Taggart.
As reported, hybrids accounted for 34.6 percent of total passenger car registrations in Georgia.
"We estimate the full market size of auto business at 3.8 billion lari ($1.1 billion) in 2020, with the formal sector accounting for 70 percent of total market size on average during last 5 years. Notably, high gross margins on used cars incentivize many individuals to trade with cars, leading to large informal turnover in the sector. Another major source of informal activities is bazaars for used car parts," the report said.
In Georgia, used hybrids are preferred over gasoline cars because of their lower total cost of ownership despite the higher price, with the latter compensated within 3 years of ownership on average.
Out of 1.38 million vehicles registered in Georgia, only 1.06 million (77 percent of total) are on roads, while others are lapsed, according to our estimates.
Moreover, passenger car penetration in Georgia is only 234 (excluding lapsed cars), far below the rates found in Central and Eastern Europe.
"We expect gradual transition towards electric mobility in medium-term. Many drivers shifted to hybrid cars, while electric vehicle (EV) imports are still low in Georgia. Four major barriers keep EV penetration rates low globally and in Georgia also: 1) high price, 2) limited driving range, 3) lack of charging infrastructure, and 4) limited choice of available models," the report said.
Rustavi car market is the largest used car market in the region, where Georgian and regional customers (Ukrainian, Azeri, Russian, Kyrgyz and others) shop for cars each year. Along with travel restrictions due to the COVID pandemic, the closure of the Rustavi car market also hindered used car exports in 2020.
To support car dealers, the government extended the car clearance period for cars imported before May 2020 from existing 2 months to March 2021 and later to June 2021.
---
Follow the author on Twitter: @Mila61979356
