Comparative Study of the Automotive Industry in Azerbaijan

Abstract

This article analysis Azerbaijan’s automotive market pre and post oil price shock, specifically focusing on two factors is undermining the market, as well as preventions for future development. Firstly, a sole dependency on oil, as major part of Azerbaijan’s economy, which is a common characteristic for high level of oil exporting countries. Secondly, currency’s instability post oil shock. There are several reasons why automotive market has not only stopped growing, but also started to decline drastically in the last four years. This decline’s main reason is both new monetary and legislative policies that are adopted by government. Preventive actions to regulate the consumer loans market and prevent excess borrowing. Adaptation of new environmental standards and new tariffs and taxes entered into force. New environmental standards main aim is to prevent pollution through forcing import of cars with meeting Euro-4 at least. However, shaping of ageing car market is inevitable, because of new monetary and legislative policies impact. Lastly, this paper will give forecast about Azerbaijan’s automotive market for the next five years.