TURKMENISTAN: U.S. ENTREPRENEUR'S CAR BUSINESS IN

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 000056 SIPDIS STATE FOR SCA/CEN; EEB; ENERGY FOR EKIMOFF/BURPOE/COHEN COMMERCE FOR DSTARKS/EHOUSE E.O. 12958: DECL: 01/14/2020 TAGS: ETRD ELTN ECON PGOV EINV BTIO TX SUBJECT: TURKMENISTAN: U.S. ENTREPRENEUR'S CAR BUSINESS IN ASHGABAT Classified By: Charge Sylvia Reed Curran for reasons 1.4 (b) and (d). ¶1. (C) On January 13, econoff met with the owner of International Automotive Resources to discuss his decision to buy used cars in the United States. and ship them to Ashgabat, while also setting up an automotive service center in the capital. The owner, a U.S. citizen from Arizona, purchased a garage and two offices in a run-down strip mall near the Ashgabat airport. He is now busy remodeling the buildings, giving them a more "Western" appearance. According to the owner, the business is fairly simple; potential Turkmen clients identify U.S.-made makes and models and a figure they are willing to pay, while putting down a cash deposit. He then has an associate in the U.S. buy the requested vehicles at auction, often well below blue book value. If no vehicle can be found, the deposit is returned or applied to a different vehicle. The cars all have minor defects that are repaired once they arrive in Turkmenistan. He added that labor in Turkmenistan is very cheap, but most mechanics are self-taught and often require a lot of training. The owner expects his business to continue to grow, and he has plans to open general repair garages and offer auto diagnostics training to would-be mechanics, if he can receive the proper authorization from the Turkmen Ministry of Education. ¶2. (C) He explained that he was a licensed auto mechanic and diagnostics technician in the U.S. He moved to St. Petersburg, Russia about three years ago in order to import and sell used cars from the U.S. to clients in St. Petersburg. He noted that potential clients would approach him with a U.S. made make and model, and he would buy those makes and models on auction for far below the blue book value. The cars would leave Miami or New York by ship to Latvia, then continue to St. Petersburg by rail. All of the cars had minimal damage that could be repaired at his small service shop in Russia. While in Russia, he sold several cars to a wealthy Turkmen client who suggested that shipping U.S.-made cars to Turkmenistan would be profitable and would have a lot less overhead than Russia. With his Turkmen contact's help, he was able to obtain a tourist visa, a work visa, and register his business with the Turkmen government in a very short amount of time. Following his first trip to Turkmenistan, he sold his business in St. Petersburg and moved to Ashgabat. ¶3. (C) The owner of International Automotive Resources explained that doing business in Turkmenistan was not that difficult, but graft exists on many levels. He stressed that he absolutely refuses to make under the table payments to bureaucrats to obtain permits and government approval, adding that his Turkmen office manager spends hours and sometimes "days" in lines at customs and other government offices meeting every legal requirement. He underscored that his decision to be an honest business man in Turkmenistan has brought him a lot of unexpected business. He recounted that a Turkmen client recently ordered a car for a particular price and paid the amount up front. When the car arrived in Turkmenistan, it had additional damage incurred during transportation to Turkmenistan. He contacted his Turkmen client and immediately provided a refund for the additional damages. The Turkmen contact was reportedly so impressed that he told all of his friends to get their cars from the "honest American." ¶4. (C) The owner added that Turkmen are very interested in high-end cars from the U.S. including Buicks, GM models, and U.S.-produced Toyotas. He noted that because of his well-connected Turkmen contact, his shop recently ordered and installed chrome accessories for President Berdimuhamedov's ASHGABAT 00000056 002 OF 002 2007 and 2008 GM Yukon SUVs. The owner opined that since he worked on the president's cars, business has also picked up, noting the importance of staying on the good side of the Turkmen President. He added that he ships cars from the U.S. to Latvia and then on to Ashgabat by rail to the train station in Gypchak, about 20 km from Ashgabat. He asserted that this route is the most reliable and least expensive way he has found to ship cars into the country. He added that from start to finish, the process of getting a car from the U.S. to Turkmenistan takes about 35 days. ¶5. (C) COMMENT: The experience of this U.S. entrepreneur is rare and encouraging. Although, he has had assistance from a seemingly well-connected Turkmen businessman, he attested that he has been able to conduct legitimate business by closely fulfilling every Turkmen legal requirement, even if it takes longer than paying bribes to circumvent or speed up the process. He stated that many of his associates in Russia were shocked to learn of his plans to attempt business in Turkmenistan, especially since he speaks no Turkmen and little Russian. Nevertheless, he is confident that he made the right business decision. In addition, this entrepreneur intends to start training Turkmen mechanics on high-tech automotive diagnostics equipment in order to help them properly repair newer, non-Russian-made vehicles, something that most Turkmen car owners would welcome. END COMMENT. CURRAN