Page 14 - bne monthly magazine October 2022

14 I Companies & Markets bne October 2022
Junked American cars do a roaring business in Georgia
Giorgi Lomsadze of Eurasianet
The black Toyota RAV4 was almost 15 years old – getting up there in car years – but it looked spanking new in the photos on Georgia’s largest automobile trade website. Dozens of other listings showed more SUVs also looking fresh off the assembly line, their model year notwithstanding. But there is a catch.
Look up these cars’ histories using their vehicle identification (VIN) codes and it becomes clear that they have taken a bad beating, many in accidents so bad the cars were assessed as totalled by insurance companies in the United States, the origin of most of Georgia’s wheels.
In its online history, this particular RAV4 looked like it had been run over by a train at least once in the U.S. Its entire front had been ripped off in an accident and the rest of the body was mangled into shapeless junk. It had been sold at auction for a few hundred bucks.
But it was nothing a Georgian couldn’t fix.
In their various states of ruin, tens of thousands of America’s discarded vehicles are shipped to Georgia every year, where an army of mechanics gets to work stitching them back together, rewiring and repainting them. To mark a car’s rejuvenation, its odometer often is rolled back as well.
The vehicle is polished to perfection and put on the block. An amateur eye may not even notice the Frankenstein monster inside the gleaming façade.
“Americans give up on their cars a little too easily,” laughed Revaz Nikolaishvili, a car dealer in Tbilisi who specialises in importing and reselling Toyota and Subaru compact SUVs. “We can take a discarded car and extend its life by decades; we make them run until their last breath.”
Georgia has become a regional hub for the used car industry. Though dominated by individual resellers, it is big business:
www.bne.eu
A used car lot in Rustavi / autopapa.ge
Selling cars, primarily used ones, is Georgia’s second largest category of exports, behind only copper ore and concentrates in 2021. The business accounted for nearly 11 percent of the country’s total exports.
A combination of cheap labour, relatively low taxes, little red tape and Georgia’s location on an international transit route has spurred a steady growth in the automobile import- export business. The pandemic put the brakes on the trade, but it went bullish again in 2021 and exports are now on track to catch up with the pre-pandemic record of $733 million in 2019.
The first half of 2022 saw a whopping 31 per cent year-on-year growth, and the cars’ share in exports has risen to 12 per cent.
Car enthusiasts from the United Arab Emirates have become Georgia’s most extravagant customers, purchasing new luxury vehicles from licensed dealers at an average price of $66,000 per pop, according to government statistics.
But the bulk of the business is in cheaper cars sold to other countries in the former Soviet Union.
Car imports by country of origin
Source: Georgian Interior Ministry