Baghdad – Iraq’s automotive sector recorded a significant decline during the first quarter of 2026 as economic uncertainty, inflation, and regional tensions weighed heavily on consumer spending. However, one Chinese automaker managed to expand its presence despite the broader market downturn.
The Iraq car sales decline became evident in new industry data released by automotive intelligence platform Focus2Move. According to the report, new vehicle sales fell by 34.3% year-on-year during the first three months of 2026. As a result, total sales dropped to 30,838 vehicles compared to the same period last year.
Analysts attribute the slowdown to several economic challenges. Rising inflation has reduced household purchasing power, while regional instability has weakened consumer confidence. Moreover, higher import costs and tighter liquidity have made vehicle purchases more difficult for many buyers.
Despite the difficult conditions, several major brands maintained their leading positions in the Iraqi market. Kia remained the country’s top-selling brand with a market share of 23.3%. However, the company experienced a sharp 41.4% decline in sales during the quarter.
Toyota followed closely behind with a 23.2% market share. Meanwhile, its sales dropped by 32.8% compared to the first quarter of 2025. Nissan secured third place and showed greater resilience than many competitors. In fact, the Japanese manufacturer limited its sales decline to just 4.1%.
The standout performer was Chinese automaker Jetour. While most brands struggled, Jetour increased sales by 23.9% and expanded its market share to 7.7%. Consequently, the company climbed to fifth place among Iraq’s best-selling automotive brands.
The Iraq car sales decline also affected the country’s most popular vehicle models. The Toyota Hilux retained its position as Iraq’s top-selling vehicle. Nevertheless, its sales fell by 34% alongside the broader market contraction.
The Kia Sorento remained in second place despite a 34.7% decrease in registrations. Likewise, the Kia Frontier dropped to third position after sales declined by 37.2%. Therefore, even the market’s strongest models struggled to maintain previous performance levels.
Economic experts link the downturn to expectations of slower growth throughout 2026. Furthermore, ongoing geopolitical tensions and fluctuations in oil revenues continue to affect Iraq’s economic outlook. Higher shipping costs have also increased vehicle import expenses, placing additional pressure on dealerships and consumers.
The electric vehicle segment faced even greater challenges. EV sales plunged by 79.3% during the first quarter, leaving the sector with only a 1% share of the overall market. Consequently, Iraq’s transition toward electric mobility has slowed considerably.
Industry observers point to several factors behind the EV decline. Limited charging infrastructure remains a major obstacle. Additionally, power supply challenges and consumer caution during uncertain economic conditions have reduced demand for electric vehicles.
The Iraq car sales decline highlights the broader economic pressures affecting consumer markets across the country. However, the success of some brands demonstrates that opportunities still exist for manufacturers able to adapt to changing market conditions and consumer preferences.