BAKU, Azerbaijan, January 9. The past year, as in many other areas, was marked by significant steps in the transport sector, and the implementation of a number of reforms. In particular, the "Requirements for technical indicators, interior and exterior design of vehicles used for regular passenger transportation" approved by the Cabinet of Ministers of Azerbaijan on March 27, 2024 and entered into force on July 1, 2024, are one of the necessary steps in terms of updating the vehicle fleet in the country and relatively reducing environmental pollution.
One of the factors that will make a significant contribution to the renewal of the vehicle fleet, and one can say the most important one, was the launch of the vehicle recycling process at the end of last year. The launch of this process plays an important role, which will lead to a significant reduction in the number of older vehicles considered unsuitable for operation, and preference will be given to more modern and environmentally friendly vehicles. In addition, the introduction of certain benefits, incentive mechanisms for environmentally friendly cars in terms of switching to green energy has significantly increased interest in new cars and electric vehicles. The increase in demand has led to certain price changes in the car market.
What is the forecast for this year in connection with the further renewal of the car fleet and, in particular, car prices against the background of the changes that occurred in 2024?
In this regard, the Executive Director of the Azerbaijan Automobile Dealers Association Eyyub Aliyev told Trend that some trends that were last year will continue in 2025.
"I think that in 2025 the demand for domestically produced cars will be higher. The increase in demand, in turn, can lead to a shortage of domestically produced cars. This will certainly increase the demand and interest in other cars on the market, mainly new cars. Because the main purpose of recycling is to update our car fleet. I believe that citizens already understand that cars with an older year of manufacture cause serious damage to both their budget and our ecology. In this regard, I would call 2025 the year of new cars," he said.
After the introduction of new requirements, a large increase in the purchase of cars of a newer year of manufacture, especially domestically produced passenger cars, began to be recorded. Thus, in the field of production of machinery and equipment, vehicles, cars, trailers and semi-trailers in Azerbaijan in January-November 2024, products worth 725.8 million manats were produced. Compared with the same period of the previous year, the production of cars, trailers and semi-trailers increased by 56.6%, the production of machinery and equipment decreased by 46.1%, and the production of other vehicles by 52.9%. From January to November 2024, 5,225 units of passenger cars were produced, which is 2,088 units more than in the same period last year.
In addition to production, a noticeable increase was noted in imports. Thus, in January-November 2024, Azerbaijan imported 2,871 units of electric vehicles worth $114.8 million. Compared with the same period of 2023, this is 134 units (4.9%) more in quantity and $3 million 745 thousand (3.4%) more in value.
How will the presence of positive dynamics in the production and import of cars affect their price?
Eyyub Aliyev noted regarding this issue that no increase in car prices is expected in the country during the first two quarters of the year.
According to him, official manufacturers have not seen any price increases. The main principles and goals of official manufacturers at the moment are to increase the warranty and quality of service. No increase in car prices is expected, at least in the first and second quarters of 2025.
"Some increase in car prices may occur with an increase in logistics costs. But in the current situation, no increase in car prices is expected," said Aliyev.