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Major automakers eying Iraq as country slowly stabilizes

Image used with permission by copyright holder

The country of Iraq is gathering the attention of some of the world’s leading auto manufacturers including Ford, General Motors, and Volkswagen. As Iraq slowly begins to stabilize in wake of all the violence it has undergone, more and more Iraqis are looking to purchase newer vehicles.

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Under sanctions placed during Saddam Hussein’s rule, western cars were frozen out of the Iraqi market. Scan the streets of Iraq now and you’ll see a large group of VW Passats that were shipped from Brazil in exchange for oil during the early eighties and early nineties.

Due to increased economic mobility — thanks in part to a dip in violence — Iraqis are beginning to see their income levels slowly rising –giving way to a demand for newer vehicles and a middle-class lifestyle. Last year about 1,500 Iraqis were killed by roadside bombs or other violence. While still abhorrently high, when compared to the more than 34,000 deaths in 2006, it marks a vast improvement. And, of course, safer streets mean more people actually wanting to drive on them.

Interestingly, as it stands now, one of the more popular cars found on the streets of Iraq is the Dodge Charger, (affectionately?) nicknamed “Obama” after the current U.S. president by Iraqis.

dodge-charger-black
Image used with permission by copyright holder

Despite the continued violence Iraqis face, the economy of Iraq is growing and projections remain optimistic. Small wonder then that the likes of Ford, GM, and VW want to move in on the untapped market. While China is still the power-player in the region when it comes to potential market growth, the lure of a growing economy and population of 30 million is more than enough to see various auto makers making a play for the middle eastern country.

That optimism seems to be shared in the region. Speaking to Bloomberg, Philippe Dauba-Pantanacce, a Dubai-based economist at Standard Chartered Bank, predicts Iraq’s economy, boosted by oil revenues and foreign investment, to grow more than 10 percent this year, outpacing all other countries in the Middle East and North Africa.

Both Ford and GM plan on investing heavily in Iraq. GM is looking to open up new showrooms and service centers, while Ford plans on following suit over the next three years with its own centers and outlets.

Despite the improving figures and growing optimism over Iraq’s security and economy, it’s clear many obstacles still remain for the burgeoning Iraqi auto industry and the Iraqi people. Further expansion will depend on concerns regarding poverty levels and remaining security hurdles.

According to the International Monetary Fund, this year Iraqi’s are expected to make the equivalent of $3,528 per person with unemployment levels reaching about 40 percent, according to the World Bank.

Image credit: Namir Noor-Eldeen/Reuters

Amir Iliaifar
Former Associate Automotive Editor
Associate Automotive Section Editor for Digital Trends, Amir Iliaifar covers the ever increasing cross-section between tech…
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