Totaled in the U.S., Sold in Europe. How Thousands of American Cars Ended Up in Car Lots Across Georgia

Over the years, containers full of damaged American cars have made their way across the Atlantic. No, they’re not going to be sold for scrap metal—They’re going to be fixed up and put on the road again.

American cars in Georgia (the nation). We’re not just talking about a few American cars, but rather hundreds of thousands. A report from Georgian outlet iFact found that the country imported 147,892 cars from the U.S. in 2023 with a combined value of $1.8 billion. Imports from the U.S. far outpaced those from the other top two import countries, Germany and Japan.

By comparison, imports from Germany and Japan that same year amounted to 12,662 ($320 million) and 25,223 ($567 million), respectively.

Why are damaged American cars being sold in Georgia? According to a recent report from the BBC, the U.S. cars that end up in Georgian car lots are in bad shape and often acquired (at a big discount) at auctions. The cars are sold off because they’ve been written off by American insurance companies.

David Gulashvili, the deputy chief executive of one of the companies buying up these destroyed cars, Caucasus Auto Import, told the outlet that it doesn’t make economic sense to fix the cars that have been badly damaged in the U.S. domestically.

“This is because of the cost of human resources, service costs are much higher, and the legal costs to get those cars back on the road, is time consuming and very expensive process,” Gulashvili said. “In the US rebuilding of a car, and making it legal again, takes six months and let's say $5,000. It takes $1,000 and one month in Georgia to fix the same car.”

“Eurasia’s used-car capital.” There’s certainly demand for Georgia’s used cars from the West and other countries. Cars are Georgia’s second most important export behind copper ore, totaling $886 million in 2022, according to the Observatory of Economic Complexity. In fact, some refer to Georgia as “Eurasia’s used-car capital.”

A bump in the road. After years of flourishing, Georgia’s used car industry is facing problems. Last summer, the Georgian government made it harder to re-export cars from the U.S. and Europe to Russia and Belarus. The move was made to comply with the West’s sanctions against Russia for the invasion of Ukraine.

Besides losing access to Russia, at least officially, used car dealers have also lost Ukrainian customers and face increased competition from Russian immigrants. In recent months, some dealers have said the market is struggling and faces an uncertain future.

American cars in Russia? On paper, Georgian dealers aren’t allowed to export cars to Russia, but it looks like some are still ending up there.

Exports of Georgia’s used cars to Kazakhstan, Kyrgyzstan, and Armenia increased drastically in 2023, jumping from roughly 7,300 to nearly 40,000, the BBC notes. Kazakhstan, Kyrgyzstan, and Armenia are members in a Russian customs union, which means that cars taken to Russia from those countries aren’t subjected to many tariffs.

iFact, the local Georgian outlet, spoke to a truck driver who transports cars to Armenia. Although Armenia is the destination on paper, the final stop is Russia.

“I am taking the car to Armenia. The paperwork will be sorted there, and then it will be exported to Russia. Everybody operates like this these days,” the truck driver said.

Image | Jeremy Vandel