New Hyundai Dealership Opens in Baghdad amid Recent Violence

Hyundai is the First New Car Retailer in Iraq since 1968

So you think the North American market is volatile? How about opening up a new dealership in a war zone?

Such was the case just over a week ago when an independent Hyundai retailer opened Iraqs first new car dealership since Chevrolet bowed out when the Baath Party took over in the fall 1968. Iraqis didnt go without cars, but rather than the variety the country once enjoyed independent dealerships were shut down and the government sold all new cars through state warehouses - so much for the glitz and glamour of the car business.

Saddam Husseins government worked out deals with its allies, with cars from Russia being among the more common imports. Baath Party officials and Saddams insiders and family had more choice mind you. For instance Saddams late son Uday drove Ferraris and Porsches, another fine example of totalitarian rule being for the people. Baath guards incidentally reported that the deposed dictator sprayed Udays car collection with bullets while enraged at his son for insulting his uncle Barazan.

After the war Iraqs borders opened to what Reuters Khaled Yacoub Oweis reported as hundreds of thousands of used cars, but despite the influx the countrys pre-owned market remains massive now that the 1990 through 2003 economic embargo has been lifted and money is once again flowing.

Although the war is "over" there is little doubt the dealer principal hardly could have expected the recent escalation in violence, not a particularly stable environment to conduct business. Nevertheless most North American dealerships would be overjoyed to experience anything near the Baghdad retailers initial success, selling nearly 40 cars within the first week.

"We have sold 38 Hyundais already, but no coupes," commented Nihad Abdul Rahman, assistant general manager of Al-Kasid, exclusive agents for selling Hyundai Motor Co. cars in Iraq, in reference to a red Tiburon sports coupe displayed in the showroom. "They are considered too flashy in these circumstances," he added.

No doubt most Iraqis are just happy to have access to simple transportation, many of whom lost their cars in the altercations. After all, with gasoline only costing about a penny per liter and prices for new vehicles lower than most anywhere else in the world Rahman and his Hyundai dealership should succeed.

"Iraqis are looking for something affordable and reliable, and Hyundai fits the bill," Rahman said after closing a deal with retired officer Khalaf Ganabi for a $10,200 Elantra. Happy with his purchase Ganabi said, "I have not had a new car since the 1960s."

The two-story dealership is in a better part of town, next to the upscale German embassy. It sells a full range of Hyundai models, from the racy coupe at $17,500 down to the subcompact Getz at $7,200.

While to most North Americans it might seem odd to open a glass house while hooligans in the neighborhood have a habit of throwing stones, at the very least, not to mention the fact that it is filled with expensive merchandise at a time when bombs have recently reduced buildings in the area to rubble, and theft and hijackings are at an all-time high. Of course Rahman feels the timing could be better but the opportunity of a virgin market is too promising to pass up.

"We are merchants and part of our profession is taking risks. The country is still in a war mode, but at least Iraqis have choice," Rahman commented.

Choice or not, steel bars are going up around the premises and guards are on hand to keep looters from driving away with free cars. "We prefer straight glass to see the cars. But the situation is not reassuring. We hired extra guards," added Rahman.

Adding to the complexity of the problem is a lack of insurance. No insurers will cover buildings or merchandise in postwar in Iraq, the main reason why the dealership is secretive about the location of its new car storage facilities.

Still, Rahman remains positive saying, "The new car market remains promising. Our prices are among the cheapest in the world and we offer a one-year warranty and a service center. This was unheard of [before now]."

The fact the free enterprise is flourishing in the newly liberated Iraq should be of some comfort to President Bush and his entourage, who are desperately looking for any signs of improvement to help reverse the spin on a situation that looks more and more like a downward spiral as the months press on and the fighting continues.