As the New Year approaches, Azerbaijan is entering the final days of import and tax incentives applied to hybrid vehicles – a shift that has already triggered noticeable price increases in the car market.
According to car dealers, prices for hybrid vehicles have risen by 2,000-3,000 manats in recent weeks. Market participants say that changes expected from January 1, including adjustments to import duties and tax conditions, will further push prices upward.
The increase is not limited to hybrid vehicles. Cars with internal combustion engines, including older model years, are also becoming more expensive. Dealers attribute this trend to the non-extension of customs incentives for hybrid vehicles, as well as rising transportation and logistics costs.
In recent years, buyer interest has increasingly shifted away from Europe toward U.S. auto auctions and Chinese-made vehicles. While demand in European markets remains relatively stable, price increases in the U.S. market are already affecting final retail prices in Azerbaijan.
Market participants expect the next three months to bring higher prices alongside declining sales volumes. A slowdown is anticipated particularly in the segment of older vehicles, while some price correction may occur after March.
Economist Khalid Karimli links the situation to higher import costs, inflationary pressures, and changes in tax policy. According to him, regulatory adjustments expected from 2026 are likely to weaken purchasing power and reduce the number of newly manufactured vehicles imported into the country.
He also notes that as electric and hybrid vehicles now account for around 18% of the market, price growth in this segment could reach at least 18%. At the same time, rising demand for conventional vehicles may also contribute to moderate price increases.
Experts say the period of relatively affordable car prices is effectively ending by the close of 2025. From 2026 onward, the market is expected to enter a phase of gradual but steady price growth.
At the same time, the impending end of incentives has already led to a temporary surge in hybrid vehicle imports. Analysts believe the coming weeks may be the last opportunity to purchase a hybrid car at lower prices, as some models are projected to rise by 3,000-5,000 manats starting in January 2026.
