‘Fact’: The Situation May Lead to Collapse of the Automobile Market and Sharp Decline in Prices

‘Fact’ newspaper writes:

Recently, the Prime Minister and various representatives of the government have been emphasizing that the additional tax revenues recorded in the state budget are a result of their work. However, it should be noted that during the past year, the process of importing vehicles from third countries has played a significant role in the economic growth of Armenia and the increase in budget revenues, which cannot be attributed to the current government’s achievements.

It is noteworthy that approximately 94 billion drams of additional funds have entered the budget solely through vehicle imports. In 2019, an unprecedented number of vehicles—according to some estimates, up to 200,000—were imported into Armenia as the preferential customs duties agreement obtained during the previous government’s tenure when Armenia joined the EAEU in 2015 was set to expire. However, as of this year, the new tariff rates of the EAEU have come into effect, effectively halting the import of vehicles from third countries.

The issue, however, is not limited to this. Many car importers have even taken out loans and imported a large number of vehicles in hopes of gaining profits after a price increase. There were serious expectations of a significant rise in car prices. However, difficulties have arisen regarding the sale of vehicles imported into Armenia last year due to restrictions imposed on car importers in Kazakhstan, which considers vehicles imported from the EAEU and registered in Kazakhstan to be illegal in their country.

As a result of this decision, protests have been occurring in various cities of Kazakhstan for two weeks now. It should be noted that the restrictions imposed by Kazakhstan on the operation of vehicles imported from its country do not comply with EAEU legislation, as according to EAEU law, citizens of member countries can purchase cars from any member country and operate them without customs clearance in their countries.

In this context, Armenian car importers are concerned that they will be unable to sell the large number of vehicles imported into Armenia. Some economists even believe that this situation could lead to a collapse of the automobile market, with prices dropping sharply.

As a result of this process, those who imported vehicles will suffer. In order to settle their credit obligations, they will attempt to quickly get rid of their cars, even agreeing to sell them at a low price. Naturally, such a situation does not serve Armenia’s interests. Therefore, the intervention of the Armenian government is necessary in this matter so that car importers can sell their vehicles abroad, and Armenia does not become a graveyard for cars.

Essentially, this issue should be raised within the framework of EAEU cooperation since it can only be regulated by EAEU legislation, which allows citizens within the union to buy cars without customs clearance.

In this context, it is not coincidental that Kazakh opposition media have released information stating that the Kazakh government is busy protecting the interests of large importers.