Iraq Autos Report Q2 2015
BMI View: The security situation in Iraq remains one of the biggest threats to the new car market. Indeed, we expect the car market to contract again in 2015, by 8%, as borders with major trading partners such as Jordan and Turkey are closed or threatened by heightened insurgent activity, stemming the flow of imports.
Jordan's Free Zone Investors Association reported that its total used car exports in 2014 fell to 91,000 from 112,000 in 2013, as Iraq is its main export market and the Karameh border crossing is 'almost closed'.
Turkey also reported a 10.1% decline in total goods exports to Iraq, which is its second-largest trading partner.
Given the threats to the logistics network in the north and west of the country, domestic production will become increasingly important as a means of fulfilling demand, especially for Iran Khodro Co (IKCO) and its proximity to Iran for the import of kits and components. The company cited a fall in transport costs, which are passed on to the consumer, and the availability of components and after-sales services as reasons for the success of its vehicles in Iraq and its decision to ramp up production.
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