Iraq: The Next Big Auto Market?
As the country's roads become safer and the economy grows, a market for new cars is emerging.
By Claire_Martin Mar 22, 2012 8:29AM
Not having seen a significant influx of modern vehicles since before the sanctions of the Saddam Hussein era, Iraqi streets have long been stuck in the 1980s (see the video, below). For many years, the pinnacle of vehicular modernity for Iraqi citizens was beaten-up Volkswagen Passats, shipped from Brazil between 1983 and 1990 in exchange for oil, according to Businessweek. But with General Motors, Volkswagen and Ford all jumping into this new, emerging auto market, Iraq could soon emerge from its Cubalike automotive time warp.
This year, the Iraqi economy is poised to grow at a rate of 10 percent -- faster than all other countries in the Middle East, Dubai-based economist Philippe Dauba-Pantanacce told Businessweek. Oil revenues and foreign investment are behind the growth, which is expected to bring higher incomes and, in turn, more automobile purchases.
A safer Iraq is also helping pave the way for a car-buying boom. In 2011, 1,500 Iraqi civilians fell victim to bombs and other violence -- a drastically lower number than in 2006, when the height of post-Saddam violence brought 34,500 deaths. The major automakers are seeing huge opportunity in Iraq, where just 1.35 million vehicles now serve the country's 30 million citizens. Neighboring Saudi Arabi, by comparison, has a slightly lower population but nearly five times the number of registered cars.
Ford, GM and Volkswagen have all moved in to get a piece of the action. Ford's Iraq sales tripled in 2011, and the manufacturer expects them to double this year. GM experienced a 68 percent spike in Iraqi sales last year and plans to invest in new service centers and showrooms. In fact, Iraq is GM's second-biggest market in the Middle East after Saudi Arabia, partly because it's been selling to U.S. forces, aid organizations and the government since 2003. (A popular model is the Dodge Charger, nicknamed "Obama" by Iraqis.)
This emerging car market reveals that times have very much changed in Iraq, with a switch to a middle-class lifestyle for some.
“It makes me feel happy to drive my own car, even with the traffic,” Damiaa Saadi told Businessweek. The 37-year-old Baghdad resident recently bought her first car, a Kia Sportage. “Sometimes I pick up my friends and we go for a meal or some ice cream in one of Iraq’s posh areas.”
“It makes me feel happy to drive my own car, even with the traffic,” Damiaa Saadi told Businessweek. The 37-year-old Baghdad resident recently bought her first car, a Kia Sportage. “Sometimes I pick up my friends and we go for a meal or some ice cream in one of Iraq’s posh areas.”
7Comments
Mar 22, 2012 12:14PM
The Iraq vets that I have spoken with said that they were appreciated by most of the people over there. Many Americans whined and complained about us going over but it turns out that it was the right thing to do.
Maybe some of the dorks with their "Attack Iraq, No!" bumper stickers will peel them off now that they have been proven wrong.
No one wants war ( hopefully) but sometimes it is necessary. World peace is a wonderful dream but is most likely never going to happen until all people can get past their feelings of hatred and racism that is based on others not being like you.
One of my favorite bumper stickers reads "War never solved anything....except Communism, Fascism, Racism and Slavery"
Hopefully Ford and GM will utilize as much American labor and materials as possible in Iraq.
Maybe some of the dorks with their "Attack Iraq, No!" bumper stickers will peel them off now that they have been proven wrong.
No one wants war ( hopefully) but sometimes it is necessary. World peace is a wonderful dream but is most likely never going to happen until all people can get past their feelings of hatred and racism that is based on others not being like you.
One of my favorite bumper stickers reads "War never solved anything....except Communism, Fascism, Racism and Slavery"
Hopefully Ford and GM will utilize as much American labor and materials as possible in Iraq.
Mar 22, 2012 10:53AM
Gotta love seeing old Caprices, Town Cars and even a Mercury Topaz in Baghdad.
I wonder if the Iraqis will ever acknowledge that the growth and prosperity they are experiencing now is because of us. As it is, the U.S. taxpayer has footed the bill for most of their military and police vehicles, not to mention enhancing the entire country's infrastructure. Getting rid of Saddam was the best thing that happened to them in the last 100 years.
I wonder if the Iraqis will ever acknowledge that the growth and prosperity they are experiencing now is because of us. As it is, the U.S. taxpayer has footed the bill for most of their military and police vehicles, not to mention enhancing the entire country's infrastructure. Getting rid of Saddam was the best thing that happened to them in the last 100 years.
Mar 22, 2012 12:44PM
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