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DE RUEHAH #0932/01 2081233
ZNR UUUUU ZZH
P 271233Z JUL 09
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC 3194
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
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UNCLAS SECTION 01 OF 02 ASHGABAT 000932 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR SCA/CEN; EEB 
 
E.O. 12958: N/A 
TAGS: ECON ETRD PGOV TX
SUBJECT: TURKMENISTAN: LAND OF USED CARS 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (SBU) SUMMARY: The passenger car market in Turkmenistan 
has rapidly expanded over the past seven years.  Most of the 
cars that have been imported to Turkmenistan during that 
period were U.S., Japanese, and German models.  More than 90% 
of imported cars are used and many were involved in accidents 
prior to arriving in Turkmenistan.  Most autos are imported by 
local independent entrepreneurs rather than by official 
dealers or distributors.  END SUMMARY. 
 
¶3.  (SBU) Turkmenistan's car market underwent a revolution in 
2002 when local entrepreneurs started importing large numbers 
of used, cheap, high-quality, right-hand-drive Japanese cars 
(mostly Toyotas) from the UAE.  That inflow of Japanese cars 
completely stopped imports of new Russian cars that had 
previously dominated the Turkmen market.  Citing safety 
reasons, the Turkmen Government gradually phased out imports 
of right-hand-drive cars.  First the government imposed a ban 
on driving such cars, which forced the owners and importers of 
such cars to convert them to left-hand drive to get around the 
ban.  To put an end to this issue, the government finally 
prohibited imports of all car models that were initially 
manufactured as right-hand drive.  The right-hand drive ban 
forced Turkmen car traders to switch to importing U.S., 
Canadian, and German-made cars from the UAE. 
 
¶4.  (SBU) Currently, U.S. and Canadian-made used Japanese 
brands dominate the market, with Toyota being the most popular 
brand.  The UAE remains one of the principal markets from 
which Turkmen import cars to Turkmenistan.  Auto markets 
located in the cities of Sharjah Al Awir, and Ajman, which 
offer used cars with body defects ranging from insignificant 
dents to completely crushed cars, are especially popular among 
Turkmen importers.  Defective cars are cheaper than undamaged 
cars and it is more cost-efficient to fix a damaged car in 
Turkmenistan rather than to purchase an undamaged car.  A 
whole "industry sector" specializing in repair of damaged 
imported cars has developed in Mary city, which has also 
become the hub of Turkmenistan's used car business, where 
people from around the country come to purchase cars.  The 
city's Customs checkpoint has turned into a huge parking lot 
for car transporter trucks loaded with unattractive-looking, 
damaged U.S. and Canadian-made Toyotas, Nissans, and Hondas. 
The same cars have an absolutely different look when they make 
their way to sales lots after having passed through bodywork 
shops.  Every parking lot in Mary is packed with newly-fixed 
shiny cars with dollar prices on their windshields. 
 
¶5.  (SBU) All trade is done in cash.  Payments are made 
immediately or in a number of installments, which is more 
expensive.  As a rule, traders inform customers about the 
damage that was repaired on the particular car. 
 
¶6.  (SBU) A limited number of local entrepreneurs purchase 
used cars directly from the U.S. using online auctions.  This 
more cost-efficient method, which eliminates UAE traders from 
the process, has not yet undermined the position of car 
traders who import cars from the UAE.  According to a local 
car trader, most of them still prefer to purchase cars in the 
UAE because it is easier to purchase a good car when you can 
physically check the car that you are buying.  Another reason 
is that it takes a much shorter time (about ten days) to bring a 
car from the UAE rather than from the U.S. (about 45-50 days), 
thus making the turnover faster.  Some car traders specialize 
in bringing used German-made cars (mostly BMWs and Opels) 
directly from Germany or from Lithuania, but the number of 
cars coming directly from Europe is relatively small. 
 
¶7.  (SBU) The prices for used cars in Turkmenistan are 
significantly higher than those in the United States due to 
 
ASHGABAT 00000932  002 OF 002 
 
 
high transportation costs and customs duties.  It costs from 
$2,200 to $2,700 to transport a car from the United States 
depending on whether it comes directly from the U.S. or 
through UAE traders.  The customs duty for a car in 
Turkmenistan is 30 cents for every cubic centimeter of the 
engine volume plus 5.2% of the price the car was purchased for 
in the UAE or United States.  These factors bring the price of, for 
 
example, a 2004 Toyota Camry to approximately $12,000 in 
Turkmenistan. 
 
¶8.  (SBU) There are official dealers and distributors of 
various brands that offer new cars for sale in Turkmenistan. 
The high prices (a basic Toyota Corolla costs around $18,000, 
Toyota Camry $25,000) make new cars unaffordable for most of 
the population.  As a result, new cars are usually purchased 
by state agencies in limited numbers. 
 
¶9.  (SBU) COMMENT:  The car market in Turkmenistan is likely 
to remain dominated by used cars because of the relatively 
low average income in the country -- something which is unlikely to 
change 
any time soon.  Imports of U.S.-made used cars (mostly 
Toyotas) will prevail in the short-term with no serious 
competition.  Private car traders will retain their 
advantage over official dealers and distributors thanks to 
their flexibility and ability to turn over their money faster. 
END COMMENT. 
 
CURRAN