ERBIL, Kurdistan Region - Car imports from the United States have hit their lowest levels in years in Iraqi markets, while Chinese vehicles have surpassed them in sales, according to an Iraqi economic studies and consultations organization.
Manar al-Obaidy, head of the Iraqi Future Foundation, told Rudaw on Sunday that “car imports from the United States to Iraq in the month July registered their lowest levels in years, reaching only 594 cars compared to 2,850 American cars imported in February of this year.”
According to Obaidy, the decline was a result of the increased popularity of Chinese cars by Iraqi buyers.
Data from China’s General Administration of Customs (GACC) shows that Iraq imported some 22,000 cars from China during the first seven months of 2025, compared to 14,000 American cars during the same period.
The primary reason behind the surge in Chinese car sales, Obaidy noted, is affordability.
Chinese vehicles tend to be cheaper than their American counterparts, “especially after the Iraqi government recently raised customs duties on car imports,” he noted.
Obaidy further pointed to “China's focus on environment friendly cars” as being another factor contributing to the increase in demand for Chinese cars in Iraq.
According to the economic expert, cars remain the third largest imported commodity to Iraq by value, after gold and electronic devices.
In early August, Rudaw reported that Chinese car imports have surged by 75 percent in Iraq.
Obaidy then stated that direct vehicle imports from China, Japan, and South Korea reached “39,500 units in the first half of the year,” marking a 17.8 percent increase compared to the same period last year.
Chinese vehicles accounted for the largest share of this growth, with 18,000 units imported.
He further attributed the growing demand to Iraq’s expanding population, which increases by “roughly one million people annually,” adding that the affordability of Chinese vehicles - many of which are modeled after well-known American and Japanese brands - “has made their ownership more achievable for different income brackets.”
The average price of an imported Chinese car is roughly $13,300, a stark contrast to the average price of a Japanese car at $34,500. This price competition is forcing other brands to adjust, Obaidy explained.
In the Kurdistan Region, local car dealers are also witnessing the transformation firsthand.
Hemin Ali, a car dealership owner in Erbil, told Rudaw in August that the market has been completely changed.
“If we divide the import market into three parts, two-thirds are now Chinese cars,” said Ali, adding that “for over eight months, the market has been dominated by Chinese brands. I now exclusively buy and sell Chinese vehicles.”
He added that the influx of cheaper Chinese models has forced other brands to lower their prices. “A Nissan that used to be priced at $16,000 is now selling for $12,500 to $13,000 because of Chinese competition.”
Another significant trend noted by Obaidy is a 45 percent increase in demand for hybrid vehicles, which use both gasoline and electricity.
Ali also pointed to the growing appeal of eco-friendly technology stating, “Last month alone, I imported 104 hybrid cars - and sold all of them in just 18 days.”
Of note, the Kurdistan Regional Government (KRG) has introduced several measures to promote the adoption of hybrid and electric vehicles, aimed at reducing air pollution and modernizing the region’s transportation system.
One of the most impactful steps is the full waiver of customs duties on electric vehicles. In September, the KRG eliminated import taxes on EVs as part of its push for cleaner energy.
Additionally, the KRG has removed registration and annual environmental fees for electric cars. A directive signed by Interior Minister Rebar Ahmad in February made first-time registration of EVs free and exempted owners from recurring environmental fees.
The ministry then-said the decision was in line with the directives of KRG Prime Minister Masrour Barzani, aimed at “combating environmental pollution and promoting sustainable transportation.”