- Independent Journalism From Today's Armenia
 November 14 , 2003 

Capital Gains: Newer, expensive and more, more, more vehicles make Yerevan a moving parking lot of car fever


The number of vehicles registered in Yerevan in three-fourths of this year shows a dramatic increase over the number registered in an entire year only five years ago.

According to Yerevan traffic police, during the first eight months of 2003 more than 21,000 cars were registered - 18,000 privately, and the rest for state use. As recently as 1998, less than 1,000 were registered in a year's time.

Recognizing the recent increase in vehicle traffic in Yerevan is as simple as standing on a street corner or, more immediately, trying to cross a major boulevard.

As local attention and concern has focused over last week's minibus accident that killed six and injured 12, so is there an awareness that the capital streets are simply more crowded. Crowded, too, with private cars of a sort that might have been unthinkable just a few years ago.

Not so long ago, the Russian Volga was a vehicle of status.

Today, however, the city is a car-aficionado's catalogue of makes and models of exotic and expensive vintage that hardly indicate an economy in distress.

Beginning in 1999 Intermotor Armenia JV CJSC, general distributor for Daimler Chrysler in Armenia has been offering customers any model of Mercedes-Benz with two-year warranties.

According to the executive director of the company Levon Arevshatyan they sell several dozen new and used cars in a year, with new-car prices varying from $70,000 to $110,000 for an S-class Mercedes.

Ladas are still the "people's car", but times are changing.

Next month a first exclusive model of Mercedes, Maybach, will be brought to Armenia. The estimated cost of the new model in Germany, is $350,000-400,000.

Adding Armenia's 32 percent custom tax and transport costs, will make the final sticker price more than half a million dollars.

Arevshatyan says one Maybach is on its way to Armenia and others have been ordered.

"I welcome the fact that there's a demand for such a car in Armenia," says Arevshatyan. "For instance there are two cars like that in neighboring Georgia, and they belong to the relatives of their president. Our customer is not the resident's relative and it means that businessmen in Armenia can obtain such cars."

Arevshatyan's dealership has serviced about 7,000 Mercedes since starting in 2000. The director of the company says that most of the cars have been imported by individual sellers and were brought in used.

"During the past years the private car market is developing rapidly in Armenia, and it has both positive and negative sides," says Arevshatyan. "The imported cars have already been used from five to seven years, but still they replace even older models in the republic."

The natural reaction is that the increase in vehicles could lead to an increase in accidents.

However, specialists in transportation assure that the streets are no more dangerous than before.

Would you like to try to cross this intersection?

"From the viewpoint of organizing traffic, naturally there are difficulties, but I don't think they've reached the stage of being uncontrollable," says Areg Barseghyan, the head of Yerevan's Transportation Department.

According to him traffic intensification hasn't yet reached the troubling point, which occurs in bigger cities of other countries.

The president of Armenian Automobile Federation Mkrtich Piltoyan is of the same opinion. He says that Yerevan's current increase in traffic simply brings it back to what it was like during Soviet times.

"It's simply because Yerevan has become a city-state and one third of the population is concentrated here," says Piltoyan.

The big difference, post-independence, is that models previously unavailable to Soviet consumers are now replacing those from the Soviet era.

By next month at least one Armenian will be enjoying the luxuries of Mercedes' new Maybach.

Armenia is taking the first steps in formation of a car market conditioned by customer demands. Imports are brought in both by individuals and dealers.

Mercedes, BMW, Skoda and Peugeot as well as several Russian models are officially presented in Armenia. Soon Audi and Volkswagen will join that list.

According to an employee at Armenia-Lada LLC car importing company Shahen Hovhannisyan, private importers have become serious competitors for dealers.

"It's true that individuals don't import cars in lots, but the number of importers is extremely large," says Hovhannisyan. "It seems like a new tradition has formed. Everyone going abroad considers it a duty to come back with a car. Almost in every yard there is a car with a 'For sale' sign."

Armenia-Lada offers its customers the cheapest cars, about eight models of Russian car companies. Their prices vary from $4,300 to $9,100. The company is also the official representative of Peugeot and the importer of Nissan and the Indian-made Maharajo.

The only way cars are brought into Armenia is through Georgia. However both the companies and private importers are very disappointed with the hospitality of the neighbor. According to car importers driving through Georgia, Armenian drivers get totally robbed. Customs fees, police and dealer fees for "protection against racketeering" increase the price of a car significantly.


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