საქართველოს ავტობაზრის ახალი რეალობა

The Georgian automotive market has already overcome multiple challenges, and this new change will not be an exception. Any regulatory or economic shock in this sector does not mark the end; it signals the beginning of a new phase.

Ultimately, success will belong to the market players who adapt to the new reality the fastest.

Today, the market is entering a phase where change is no longer a temporary fluctuation; it is becoming a structural transformation.

INCREASED CUSTOMS COSTS FOR VEHICLES OLDER THAN 6 YEARS - A NEW FILTER FOR THE MARKET

Starting from April 2026, a new excise taxation model for passenger vehicles came into effect. For vehicles aged between 0 and 6 years, the base rate is set at GEL 1.5 per 1 cm³, while vehicles older than 6 years are taxed at GEL 4.5 per 1 cm³.

As a result of this change, customs clearance costs for vehicles manufactured before 2020 have, in some cases, increased by 3 to 4 times, directly affecting their market liquidity.

Importantly, the regulation does not apply to electric vehicles, allowing them to maintain their competitiveness in the market.

It is also worth noting that importing vehicles manufactured before 2020 for re-export purposes is not restricted, which leaves a certain level of flexibility for international market players.

THE MARKET’S SHORT-TERM RESPONSE AND THE ADAPTATION PHASE

The market responded quickly to the regulation announcement by reducing import volumes.

The Georgian automotive market is highly seasonal, and the beginning of the second quarter is traditionally considered a slower period. The impact of the new regulation further reduced market activity temporarily.

However, market expectations also created the opposite effect - purchases and inventory accumulation increased during February and March. Today, the market has already moved beyond the initial shock and entered an adaptation phase, which typically lasts between 2 to 6 months. During this period, new price levels, demand structures, and inventory allocations are reshaped.

THE RE-EXPORT MARKET - A STABLE SEGMENT AMID TRANSFORMATION

The re-export market remains relatively stable. Vehicles up to 7 years old - mainly Japanese, American, Korean, and partially European brands with internal combustion engines - continue to dominate this segment.

This segment is less dependent on local regulations because its dynamics are driven by regional demand rather than the domestic market alone. The list of top-performing models once again demonstrates that the key success factors in the re-export market are:

Liquidity, spare parts availability, durability, and resale value - rather than premium image.

The overall picture shows that the market is not shrinking entirely - it is being redistributed across different segments.

Today, the main re-export destinations are:

KAZAKHSTAN | KYRGYZSTAN | AZERBAIJAN | ARMENIA | MOLDOVA | TAJIKISTAN | TURKMENISTAN

EUROPEAN MARKET EXAMPLES AND THE EVOLUTION OF DEMAND

Georgia currently has approximately 490 vehicles per 1,000 residents, which is still lower than in many European countries. At the same time, a significant part of the vehicle fleet is outdated, while the system for deregistering non-operational vehicles has historically been ineffective.

For example, there are still 220,024 registered VAZ, GAZ, and Moskvich vehicles in the country.

Considering these factors, the actual number of operational vehicles is estimated to be between 300 and 350 per 1,000 residents.

These figures show that the market’s growth potential is nearly double. In reality, demand for vehicles is not disappearing - especially while municipal transportation in Tbilisi is still not fully developed, and transportation alternatives in many regions remain limited.

GEORGIA IS MOVING FROM AN “EMOTIONAL CAR MARKET” TO A FUNCTIONAL ONE

Today, the market is gradually shifting toward a functional model, where purchasing decisions are increasingly based on:

• Total cost of ownership
• Fuel efficiency
• Operating and maintenance costs

MARKET TRANSFORMATION - NOT A DECLINE, BUT A REDISTRIBUTION

GROWTH OF THE LEASING MARKET AND CHANGES IN FINANCIAL MODELS

The rejuvenation of imported vehicles and the rise in average vehicle prices are directly driving up demand for financing and leasing products. The market is gradually moving toward a model where the customer’s primary question is no longer “How much does the car cost?” but rather: “How much does owning this car cost me?”

As a result, competition is shifting from price alone to financial flexibility.

THE EUROPEANIZATION OF GEORGIAN CONSUMER BEHAVIOR

Ultimately, Georgian consumer behavior is becoming increasingly similar to European trends:

• Preference for economical and practical vehicles
• Growing demand for hybrids and electric vehicles
• Active use of financing products
• Purchasing decisions based on operating costs and long-term ownership expenses

The Georgian automotive market is entering a new phase where price and volume alone are no longer decisive factors. The key drivers of success are speed of adaptation, financial flexibility, and the ability to accurately understand changing consumer behavior.

The market is not disappearing - it is evolving. And it is evolving toward a more structured, financially rational, and European-oriented model.