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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    Iraq Car Market Ripe for Rapid Expansion

    Hkp1
    Hkp1
    Hkp1
    Interacting Investor
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    Posts : 3118
    Join date : 2012-12-19
    • Post n°1

    Iraq Car Market Ripe for Rapid Expansion Empty Iraq Car Market Ripe for Rapid Expansion

    Post by Hkp1 Mon 25 Mar 2013, 9:16 pm

    Iraq Car Market Ripe for Rapid Expansion


    By Emel Akan
    Epoch Times Staff Created: March 25, 2013 Last Updated: March 25, 2013


    ERBIL,
    Iraq—Western cars were banned in Iraq under Saddam Hussein. The country
    was flooded with VW Passats that were shipped from Brazil between 1983
    and 1990 in exchange for oil. Even now, cars up to 30 years old,
    including these Passats can still be seen on the roads, and car
    ownership is tiny at only 1 in 20.

    But with security settling
    down in recent years, increasing interest in cars has led the automotive
    industry to invest heavily to capture market share.

    “This market
    has been deprived of cars for so many years. The number of cars
    relative to population size is still very low,” said Nihad Zacharia,
    managing director of NIM Trading, the major distributor of Kia in Iraq,
    citing the low penetration levels as a big opportunity for automakers.

    Iraq
    has a population of over 30 million and vehicles per capita is
    estimated around 5 percent, lower than neighboring countries Iran and
    Turkey, which have 15 percent penetration.

    Even after the fall of
    Saddam Hussein in 2003, security and poverty stayed as major hurdles
    for growth of the automotive sector. However in recent years the streets
    have become safer. Improvement in safety and wealth are seen as
    important drivers for growth in car sales.

    “Over the next 4–5
    years we expect growth in automotive sales to be tremendous. Security is
    not an issue in Iraq,” said a representative of Volkswagen and Audi.

    There
    is no reliable source for the number of cars sold in 2012. However
    according to estimates the number could be between 200,000 and 250,000.
    “We know that roughly 145,000 cars entered through Northern Iraq border
    and 100,000 through other borders. These include both new and used
    cars,” said one distributor.

    The huge growth potential of the
    Iraqi market has triggered intense competition among major brands to
    capture market share. Brands such as Toyota, Hyundai, Kia, GM, and
    Nissan have started to invest heavily in marketing to tap the rising
    demand.

    Sumitomo has been active in Iraq since 1960s with the
    sale of Toyota SUVs. The company has successfully met the rising demand
    for pickup trucks and taxis in the northern part of the country.

    According
    to the information provided on Sumitomo’s website Iraq is expected to
    grow into a large market, equivalent to Saudi Arabia, where 200,000
    Toyota cars are sold every year. Sumitomo pledges it will place greater
    emphasis on car sales in Iraq than ever before, aiming to sell 100,000
    cars a year in the future.

    Kia sold 50,000 units in Iraq last
    year and has a quite sizable marketing budget according to Zacharia. “In
    addition to direct ads, we participate in auto fairs, invest in
    sponsorships and social responsibility projects. We have sponsored
    sports teams in Iraq and launched road safety programs at schools
    together with Ministry of Education to increase traffic awareness and
    make the public trust the authorities, which is key to building modern
    society.”

    Chinese brands such as Geely and Cherry are also very
    popular in Iraq. According to IHS Global Insight Chery’s cumulative
    exports to Iraq were 30,000 in 2012.

    Despite improvement in
    wealth and security there are still some hurdles to overcome. In Iraq
    all vehicles are bought with cash, and car insurance is not possible.
    However, improvement in banking and insurance systems should help boost
    car sales in the future.

    A shortage of manpower in service
    centers is another issue. To overcome this problem, a vocational school
    project has been started by leading brands including Kia, GMC,
    Chevrolet, Cadillac, and MAN. With the support of the Ministry of
    Education, The Polytechnic University of Erbil and GIZ (The German
    Agency for International Development) Iraqis are given vocational
    training and employment opportunities in automotive sales, service, and
    parts departments.

    Improvements in road infrastructure will also
    be key for future growth of the automotive sector in Iraq. “Roads are
    not sufficient. We see traffic jams in many cities with rising
    migration. And there is no public transportation.” said Zacharia.

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