Iraq vehicle market growth continues to break records in 2025, with strong results across all segments, including electric vehicles.
Iraq’s vehicle market surged by 24.1% in the first quarter of 2025. This rise built on the strong momentum of recent years. January showed a 34.3% gain, February rose by 39.6%, and March increased by 7.2%.
Kia became the new market leader in Iraq, overtaking Toyota. Kia’s growth reached 26.1%, while Toyota slipped to second place with a 3.4% decline. MG moved into third, gaining 57.1%.
Nissan made the biggest jump. It climbed 14 positions and now ranks fourth, with a staggering 1463.6% increase. Suzuki dropped two spots into fifth, following a 34.6% decline.
Among top-selling models, the Toyota Hilux led the rankings. It posted a 10.3% rise in year-on-year sales. The Kia Frontier followed, increasing 12.7%.
Meanwhile, the Iraq vehicle market growth includes the electric vehicle (EV) segment. The EV market jumped 41.6% in the first quarter, now making up 3% of total vehicle sales. Though still small, this marks steady progress.
Toyota dominated Iraq’s EV market with 97% of all electric vehicle sales. Lexus and Land Rover followed far behind. Iraq aims to increase EV use as part of efforts to reduce oil dependence.
The broader economy supports this trend. Iraq’s economy is expected to grow 5.3% in 2025. Most gains come from non-oil sectors, including technology and infrastructure. Internal stability, improved since 2022, creates a better environment for investment.
However, risks remain. Iraq still relies heavily on oil revenue. That dependence makes the country vulnerable to price shocks and regional tensions. Fiscal imbalances and rising debt could slow progress unless reforms continue.
Still, Iraq shows long-term recovery in the auto sector. The market collapsed during 2014–2016 due to conflict, with sales falling over 80%. Since 2017, however, the Iraq vehicle market growth has steadily rebounded.
Sales grew 26.7% in 2021 and 23.9% in 2022. In 2023, they rose 22.1%, followed by 27.7% in 2024, totaling 158,076 units. EVs entered the picture in 2024, making up 2.5% of sales that year.
Growth in agriculture, services, and construction also supports car demand. Iraq’s government looks to labor reform, gender inclusion, and technology to boost future progress.