Iraq’s automotive market size is one of the biggest in the Middle East and North Africa (MENA) region. Foreign companies are planning to expand their manufacturing plants in the country, and new players continue to enter the market. In April, premium car brand EXEED launched in the Iraqi market, its first foray into the region. Currently, Toyota, Ford, and Volkswagen are the top three brands in the industry.
Government support for the industry is strong as they continue to look at the automotive market growth in Iraq as one of the biggest sources of revenue. Foreign direct investments in the industry help make a significant contribution to the country’s total GDP. After suffering a 16.7% loss in sales in 2020, the market grew by 27.6% in 2021, after showing a strong performance all year.
What is the current outlook of the automotive industry in Iraq, and how can the market grow even more in the next decade?
Current Trends in Iraq’s Automotive Market
In 2021, there was an upward trend in Iraq’s automotive market. Full-year sales totaled 85,380 units, with passenger cars enjoying an increase in the market share. Commercial vehicle sales have also seen a continuous uptick in numbers since 2017.
There is a positive outlook for the Iraqi economy until 2026, with households gaining more purchasing power in the coming years. In effect, a strong surge in vehicle sales is expected to contribute to Iraq’s automotive market growth.
Passenger cars stand as a big driver of the industry’s growth. The passenger cars market in Iraq is expected to increase in revenue to $1.16 billion this year, with the largest segment being large SUVs.
Just this year, Iraq launched its first electric vehicle (EV), the Jaguar I-Pace. The British brand is available at a Land Rover and Jaguar agency that is headquartered in Baghdad, where it is accepting reservations for the model and inviting consumers to test drive the EV.
Prospects for Iraq’s Automotive Market Growth
With the continuous growth of Iraq’s automotive market size, many carmakers will find great opportunities for expansion in the region by opening dealerships in the country. Brands that can keep up with consumer preferences in Iraq can invest in learning more about the market and test the waters there before exploring opportunities in the rest of the region.
With high-end automotive brand, EXEED already banking on the positive outlook of Iraq’s automotive industry, big and small players alike may find that they have the market for their models in the country. Even those that are looking to expand their manufacturing in Iraq will also find it easy to hire talents that are experienced in the industry.
The country is also ushering in a new beginning with EVs, and more infrastructure and incentives for consumers to choose EVs over petroleum-powered vehicles can be explored and implemented. Government policies that encourage the growth of the automotive market in Iraq are also essential, as consumers continue to exercise their purchasing power by buying passenger cars.
