According to statistics produced by the ministry of trade and industry, 451,337 cars have been imported to the Kurdistan Region over the past five-and-a-half years.
Car importations fell dramatically after 2013 due to the financial crisis. For example, 126,000 cars were imported to the Kurdistan Region in 2013, but only 35,000 in 2016. But this trade in the first half of this year increased by 30 percent compared to the first half of last year.
“Due to the war on ISIS and the financial crisis, car imports fell until 2016. But this trade has increased since last year because of facilitations made by the government on border gates to import cars and difference in tax, customs fees and price of Kurdistan’s plate numbers compared to Iraq’s. Car imports in 2017 increased by 60 percent compared to 2016,” Nawzad Adham, the director general of trade at KRG ministry of trade and industry, said.
According to the trade ministry, 75 percent of cars imported to the Kurdistan Region will eventually be exported to Iraqi cities. Some car dealerships only import cars to Iraqi cities.
Soran Jalal is owner of Mini International Company for Car Trade. It mainly imports American cars to the Kurdistan Region.
“In the past, the government had a contract with an international company that was importing good quality cars. The government didn’t allow importation of used cars, heavily damaged cars, cars with blown up airbags, or sunken cars,” said Jalal. But the government didn’t allow its contract with this company last year.
“Nowadays, only a superficial inspection is done on these cars. The government currently allows the importation of all types of used cars in order to increase its revenues. That is why traders are nowadays importing scores of sunken cars and cars with blown up airbags from Dubai to the Kurdistan Region.”
US insurance companies won’t cover water-damaged cars or cars that have their airbags blown up in car accidents there, where car insurance is required. Many then sold as scraped cars.
“Some Iraqi and Emirati traders buy these cars and then export them to Iraq after making initial repairs. These cars will undergo an initial inspection at the Kurdistan Region’s border gates, especially in Haji Omaran and Bashmakh border gates, and then allowed to enter the region. There is big demand for them because of their cheap prices. These types of cars make up 50 percent of the cars imported to the Kurdistan Region,” Jalal explained, adding that it’s difficult to import the cars through Turkey, but easier through Iran.
But the KRG has dismissed claims it has been facilitating the importation of sunken or other bad quality cars.
“We decided to toughen the conditions for registering these types of cars after an increase in the importation of these kinds of cars,” said Col. Asad Mala Karim, the spokesperson for Kurdistan Region’s Transportation Department.
“There is a special inspection team to check used cars imported to the Kurdistan Region to see whether they are water-damaged or suffered severe damage. They will not be registered if they are of either condition,” he added.
These cars are first transported to the United Arab Emirates, but the Emirates’ government doesn’t allow these cars to be used there due to their condition.
Hussein Hasan is manager of Auto London Company that imports 500 to 600 used cars from the United States to the Kurdistan Region.
“Brand new and used cars are sold in the US. There is a type called ‘clean title’ cars,” he said “These cars have no problem and are therefore expensive. But sunken cars or cars involved in accidents are cheap.
“Traders from Emirates import the latter at the request of Iraqi traders. But the Emirates government doesn’t allow these cars to be used on its roads, which is why they are imported and sold outside cities.”
However, the consumer ends up assuming the risk of buying the cheaper repaired cars.
“Sunken cars can never be restored to their normal condition. They keep experiencing mechanical and electrical problems. Cars involved in accidents face the same problems. Their airbags have blown up and low quality spare parts have been used to repair them following the accident,” Hasan said.
