INSTAT data shows some 50,166 cars worth 20 billion lek (Euro 142 million) were imported in 2013, down from 56,539 cars, worth 17,994 (Euro 126 million) in 2012.
TIRANA, April 16 – Car imports slowed down in 2013 when the Albanian economy grew by only 0.4 percent, the lowest rate in the past 16 years. Data published by the country’s state statistical institute INSTAT show car imports, overwhelmingly dominated by second-hand cars, registered a double-digit decline, also affected by fuel prices standing at a record high.
INSTAT data shows some 50,166 cars worth 20 billion lek (Euro 142 million) were imported in 2013, down from 56,539 cars, worth 17,994 (Euro 126 million) in 2012, hinting an increase in imports of new cars.
Some 26,113 cars, worth 5.5 billion lek, were imported in the final quarter of 2012, taking the total number of imported cars during the whole of 2012 to 56,499 cars, up 8.8 percent compared to 2011, according to INSTAT.
In the final quarter of 2011, when customs duties were lifted significantly lowering car prices and a new law on annual taxes discouraging the use of old cars entered into force, a record 23,503 cars were imported, six times more compared to the final quarter of the previous year.
Having to pay only 20 percent in value added tax, some 51,894 cars were imported in 2011, more than treble compared to 2010.
While the new law lifting customs duties cut second-hand car prices by at least 30 percent, Albanians increased purchases for cars produced in the past 5 to 10 years, also because of the new tax system considerably increasing annual fees for older motor vehicles.
The removal of customs duties was accompanied with a new taxation system based on cars’ age, the engine capacity and the kind of fuel they use. Car taxes which since September 2011 have seen a sharp rise for second-hand cars more than 10 years old were halved in a move taken just two months ahead of the June 2013 general elections.
Concessionaires worried over second-hand car imports
Car concessionaires operating in Albania have warned they are on the brink of bankruptcy with their sales having sharply fallen since a new law lifting customs duties on second-hand cars entered into force a couple of years ago. In an open letter to government in late 2013, the Association of 16 car concessionaires operating in Albania says the import of new cars has dropped by 60 percent since changes to the national taxes made import of second-hand cars cheaper and easier in July 2011. Car concessionaires say they used to import 4,000 to 6,000 new cars each year but changes to the law in 2011 have sharply cut their sales and trebled import of second-hand cars, causing considerable damage to companies trading new cars.
“Currently, some 50,000 second-hand cars a year are imported to Albania each year, most of which are not allowed to be used or resold in their countries of origin,” says the Association. Some 16 concessionaires operate in Albania with 100 showrooms and employing around 2,000 people. They are estimated to have invested Euro 600 million in Albania.
A study carried out by the Association of Albanian concessionaires shows that 95 percent of cars traded in Albania are second-hand ones, and do not pay taxes especially VAT.
Car concessionaires demand the reintroduction of import tax and the fiscal discipline of the second-hand car sale market which does not apply VAT.
