Russia opens backdoor to American cars

by Bill Buys

SANCTIONS don’t really do much.

Joe Biden’s government slapped a trade embargo on Russia after its invasion of Ukraine, but it has made no difference to the number of US vehicles finding their way into Putinland.

On the contrary, the Russian car market has steadily grown from 2023.

Analysts reckon about 1.25 million new cars were sold there last year, most of them Chinese brands, headed by Chery, GWM and Geely -- but local brands Lada and Geely also sold well.

American brands flourish there too, because neighbouring Georgia has become a regional hub for the used car industry and selling primarily used ones is Georgia’s second largest category of exports.

The country officially halted re-exports to Russia to comply with the sanctions, but it now simply exports to other neighbours, Kazakhstan, Kyrgystan, Armenia and Azerbaijan.

Here entrepreneurs happily drive around in US-made Toyotas, Hondas or Teslas, or drive over the border and sell them for a healthy profit in Russia.

As well, car enthusiasts from the United Arab Emirates have become Georgia’s most extravagant customers, but the bulk of the business is in cheaper, and often repaired cars, sold to other countries in the former Soviet Union.

The second largest ex-Soviet economy after Russia, Kazakhstan has emerged as the third-biggest car importer from Georgia.

The top spot is occupied by next-door Azerbaijan, which snaps up over half of vehicle exports from Georgia.

Russians can buy various models of Lada and Moskvitch, but if you want something different, why not get a cheaper and fancier car from America?

There’s a huge trade in cars from the US that have been written off by insurance companies.

In fact, such vehicles are said to be the origin of most of Georgia’s wheels and even some badly damaged cars are quickly back in good shape.

They say: "There’s nothing a Georgian can’t fix."

In their various states of condition, tens of thousands of America’s damaged or discarded vehicles are sold by auction and shipped to Georgia every year, where an army of technicians gets to work stitching them back together, rewiring and repainting them -- all at much lower cost.

And to mark a car’s rejuvenation, its odometer is often rolled back.

The vehicle is polished to perfection and put on the block. An amateur eye may not even notice the change.

“Americans give up on their cars a little too easily,” laughed Revaz Nikolaishvili, a car dealer in Tbilisi who specialises in importing and reselling Toyota and Subaru SUVs.

“We can take a discarded car and extend its life by decades; we make them run until their last breath.”

A major player is Columbus Shipping and its website invites anybody to partner with it and become independent dealers.

"Partnering with Columbus is lucrative," it says.

"Even with all expenses like auction fees, delivery and repairs, the final cost of the car is still lower than the market price of the same car in Europe.

"Typically, the income of a dealer working with Columbus is over US $5000 a month with the sky as the limit as to how much more you can earn."

Clients can usually buy a car with low mileage at auctions in the US since Americans tend to change cars every couple of years.

The company provides cost-effective overland transportation to harbours in America and it ships vehicles from most major US and Canadian ports, among them Los Angeles, Newark, Savannah, Houston, Indianapolis, Montreal and Toronto.

Columbus says it can also help its partners quickly restore important documentation, such as title to the vehicle.

On the outskirts of Rustavi, a town 20km southeast of Georgia’s capital, Tbilisi, is a vast network of open-air car parks.

These lots, which cover an area equivalent to about 40 footy grounds, host thousands of vehicles, including luxury brands like Mercedes, Porsche, Jaguar, and Tesla.

So, sorry, Joe. Your embargo has not prevented any Ivans or Anatolys from owning a ‘Made in the USA’ car.

But it has made many Georgians and their neighbours very happy.