TURKMENISTAN: NO RACE TO ATTEND INTERNATIONAL AUTO

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001634

SIPDIS

STATE FOR SCA/CEN; EEB;
ENERGY FOR EKIMOFF/BURPOE/COHEN
COMMERCE FOR DSTARKS/EHOUSE

E.O. 12958: DECL: 12/18/2019
TAGS: ECON PGOV ELTN BTIO EINV ETRD TX
SUBJECT: TURKMENISTAN: NO RACE TO ATTEND INTERNATIONAL AUTO
EXHIBITION

REF: A. ASHGABAT 1601

B. ASHGABAT 1153

Classified By: Charge Sylvia Reed Curran for reasons 1.4 (b) and (d).


1. (C) On December 18, EconOff attended the International
Automotive Exhibition in Ashgabat. Despite, a growing number
of auto enthusiasts in Ashgabat, there was poor attendance by
auto industry representatives and by the public. The
Exhibition was opened by the Deputy Chairman for Education,
Health, Science, and Religion Hydyr Saparlyev, who did not
seem comfortable talking to attendees about cars. (NOTE: The
Deputy Chairman for Industry and Motor Transport was
accompanying President Berdimuhamedov in Japan. END NOTE.)
Saparlyev raced through opening comments from the president
(COMMENT: This is his normal speaking style. END COMMENT.),
and completed his tour of the exhibition in what seemed like
record speed. As Turkmenistan does not have its own auto
industry, high-priced, vehicles from Germany and East Asia
dominated the show, raising the question who in Ashgabat
could afford such vehicles.


2. (C) Generally, both main floors of the exhibition hall
are packed with kiosks, vendors and attendees during this
type of industrial exhibition. However, during the
automotive exhibition only half of the available space was
used. In addition, few vendors provided attendees with
promotional items, which is generally a tradition at such
events. Mercedes-Benz had the most floor models available
with car prices ranging from $90,000 to $150,000. The other
German carmaker with vehicles on display, Volkswagen, proudly
displayed its popular Touareg SUV, the Turkmen Ministry of
Oil and Gas vehicle of choice (ref B). In addition, Japanese
Toyota and Korean Hyundai models also generated a lot of
interest from the few participants at the exhibition. The
Iranian company Khordo displayed a couple of its small
Khorassan-produced Peugeots. The Iranian Ambassador to
Turkmenistan proudly announced to attendees that Turkmenistan
is a growing market for Iran-made vehicles, stressing that
Turkmen could purchase European-quality cars from Iran at
affordable prices.


3. (C) Mercedes-Benz dealer Serdar Orazov stated that the
Turkmen tax structure for foreign cars allows high-end
Mercedes to be sold at affordable prices. When pressed
whether $90,000 was affordable for the average Turkmen,
Orazov answered that it was affordable for the average
Turkmen businessman, adding that the Turkmen new car market
is just emerging. Although Turkmen banks do provide auto
loans, potential car buyers must put down 30 percent of the
sticker price and the interest rate is 16-18 percent per
year, making the purchase of a new car cost prohibitive for
most. In addition, the Turkmen President recently cracked
down on a thriving older, used car market by banning the
import of any vehicle made before 2000, starting on January
1, 2010 (ref A). Car dealers at the exhibition noted that
new car showrooms were starting to sprout up in Ashgabat,
hoping that the ban on older cars would buoy up the fledgling
new car market.


4. (C) COMMENT. Although Turkmen President Berdimuhamedov is
known to be an imported car enthusiast, the poor attendance
at the international automotive exhibition reflected the
overall, low affordability of new cars among Turkmen. In
addition, one attendee explained the poor attendance by
speculating that few Turkmen businessmen would shop for a new
car at a show attended by Turkmen government officials. He
added that doing so would alert the GOTX to those who could
afford expensive imported cars, something successful Turkmen
business people try to keep from the government. END

ASHGABAT 00001634 002 OF 002


COMMENT.
CURRAN