Georgia cars: How the country became a hub for used cars

Georgia used to export second-hand US and European cars to its northern neighbour Russia, with whom it shares a border. But that has officially stopped as a result of Russia’s invasion of Ukraine in 2022.

In September 2023, the Georgian Revenue Service announced that, in line with the then latest Western sanctions against Russia, it was restricting the re-export and transit of automobiles imported from the US or Europe to Russia and Belarus.

And Georgian officials have long denied that the country has been complicit in aiding Russia’s evasion of the trade embargoes.

Yet a recent investigation, external by Georgian media publication Ifacti showed numerous loopholes exploited by an army of car dealers on both sides of the Russian-Georgian border.

David Gulashvili says that his company no longer has any trade with Russia. “From day one of the war we have restricted any kind of transactions from Russia, any kind of exports to Russia. You will not see a single car exported by Caucasus Auto Import to Russia.”

However, he adds that there is no existing mechanism to monitor the final destination for re-exported cars going to other countries.

And since Russia’s invasion of Ukraine there has been a steep rise in exports of used cars to Kazakhstan, Kyrgyzstan and Armenia – all of which are members of the Russia-led customs union.

It means that a vehicle registered in any of those countries can be driven to Russia with minimal tariffs.

Figures from Georgia’s national statistics agency suggest that cars are indeed going on to Russia. It says that in 2022 Georgia exported 7,352 used cars to Kazakhstan, while in 2023 the number was 39,896, a more than five-fold increase.