Georgia’s Automobile Business
Similar to global trends, Georgia’s auto business also faced supply constraints and price increases in 2021-22, with increased transportation costs further adding to the burden. Prices for new cars were up 15%-20% y/y and used car prices increased 23% y/y in 2022, while transportation costs varied among dealers. Transportation costs are set to improve in 2023, as global transportation index is normalizing to pre-pandemic levels.
Dealers expect strong demand on new cars to continue in 2023, but challenges with supply and pricing may persist. Official dealers expect sales to increase by 15-20% y/y in 2023, while price expectations are uncertain, with no decline anticipated from dealers. According to our analysis on expected supply and pricing for new cars, some European brands may still face supply constraints and price increases in 2023. In contrast, expectations for Japanese and South Korean brands are positive, given their success in managing the global semiconductor shortage. American brands are also improving production, with prices expected to decline in 2023.