In brief
Georgia has emerged as a vital hub in the global used car market, leveraging its geographical advantages and affordable labor to refurbish vehicles primarily sourced from the US. Although official channels to Russia have ceased, many cars are circumventing sanctions through third-party countries.
On the sprawling outskirts of Rustavi, Georgia, a vast expanse of open-air car parks houses thousands of vehicles. This small South Caucasus nation has carved out a significant role in the international used car market by re-exporting cars acquired from US auctions. Many of these vehicles arrive as write-offs, salvaged by skilled Georgian mechanics who offer affordable refurbishment.David Gulashvili of Caucasus Auto Import states that the demand for Western vehicles has transformed Georgia's auto industry. In 2022, Georgia imported cars worth $3.1 billion, subsequently exporting $2.1 billion worth, underscoring its second-largest export. Though sanctions halted direct vehicle exports to Russia following its 2022 invasion of Ukraine, a rise in re-exports to Kazakhstan, Kyrgyzstan, and Armenia—Russia-friendly states—suggests an indirect supply line.Despite Georgia's official stance on abiding by sanctions, loopholes reveal that many cars find their way into Russia. Geographically positioned between Europe and Central Asia, with its cost-effective vehicle refurbishment industry, Georgia remains pivotal in the global used car trade. As demand for hybrid and electric vehicles surges, its role continues to evolve within this vibrant, albeit geopolitically complex, sector.
