Iraq, despite war-mode, is buying cars once more

Khaled Yacoub Oweis in BaghdadA red Hyundai sports coupé graces Iraq's first new car showroom, opened last week as violence rose…

Khaled Yacoub Oweis in BaghdadA red Hyundai sports coupé graces Iraq's first new car showroom, opened last week as violence rose to levels not seen since the war.

"We have sold 38 Hyundais already, but no coupés," said Nihad Abdul Rahman, assistant general manager of Al-Kasid, exclusive agents for selling Hyundai cars in Iraq. "Coupés are considered too flashy in these circumstances.

The two-story showroom near the elegant German embassy has models ranging from the Getz to the Coupe.

The timing for opening a new glass-fronted showroom filled with new cars may seem odd. Suicide bombs destroyed several buildings in the area in the past few months and residents say theft and hijackings have been on the increase.

READ MORE

But, says Rahman, his trading company could not wait to enter a virgin market and take advantage of an environment car dealers consider heavenly - if it was not for the bombs.

Petrol costs around one cent a litre in Iraq. There is no income tax in force and government attempts to impose a five per cent tariff on imports have repeatedly failed.

"We are merchants and part of our profession is taking risks," he says. "The country is still in a war mode, but at least Iraqis have choice."

Iraq has had no official car dealerships since Chevrolet packed up and left as the Ba'ath Party came to power in 1968. The state acquired a monopoly on importing new cars. Showrooms were banned and sales were conducted from state warehouses.

Saddam Hussein's Iraq preferred to deal with countries it considered allies, although not particularly renowned as leaders in the car industry, such as Russia. But government officials and Saddam's entourage were treated far better.

Saddam's late son Uday liked Porsches and Ferraris, though Saddam riddled his son's collection with bullets after becoming angry with his son for insulting his uncle Barazan, guards to the former president say.

Iraq's borders opened after the war and restrictions were effectively scrapped on importing cars. Hundreds of thousands of cars entered the country, but they were overwhelmingly second hand.

Rahman says that Iraq's used car market would remain huge, given an increase in income following the end of the crippling 1990-2003 economic embargo.

"The new car market remains promising," he says. "Our prices are among the cheapest in the world and we offer a one-year warranty and a service centre. This was unheard of."

As he spoke, workers were fitting steel bars to the showroom's windows.

"We prefer straight glass to see the cars," says Rahman. "But the situation is not reassuring. We have hired extra guards."

The dealership has no insurance and keeps the location of its warehouses secret for fear of looting.

But Khalaf Ganabi, a retired officer who bought an Elantra, was happy with his new set of wheels. "I have not had a new car since the 1960s," he said.