New cars hot in Baghdad

BAGHDAD --- Business is booming at Baghdad car dealerships as well-heeled Iraqis are indulging in a passion long out of reach -- spiffy new cars.

BMWs, Nissans, Hyundais and even military-style Hummers are now weaving around the shabby, smoke-belching wrecks and donkey carts that have clogged the streets over two decades of sanctions and war.

That might make Baghdad one of the few cities worldwide where the auto industry is doing relatively well -- at least compared to the worst of the war, when sales were stagnant. With its limited banking system, Iraq has largely avoided the global financial meltdown.

Unlike other places in the world, gas prices -- about $1.52 a gallon -- aren't much of a deterrent to those Iraqis who are eager and able to catch up with the good life behind the wheel of a new car.

Not so long ago, cruising the capital in a new car was asking for trouble. Carjackers were seemingly everywhere -- either envious militiamen or kidnappers on the lookout for victims with enough cash to pay fat ransoms.

Those bad days are not entirely over, but with violence ebbing, Iraqis who can afford it are eager to live large.

"Despite the high price, driving a new car gives me a great sense of happiness and comfort," said Muhannad Khazim as he cruised an upscale neighborhood with three friends in a 2007 Hyundai Elantra he had bought two days earlier.

The city traffic department refused to say how many new cars were registered over the past year.

Showrooms are popping up in safer neighborhoods around town to meet the demand, though. They are offering selections from sleek sports cars to four-wheel-drive behemoths, most imported from Amman, Jordan or Dubai in the United Arab Emirates.

Imad Hassan said sales at his Aqaba Dealership in east Baghdad soared about 90 percent in 2008 over the previous year, when fighting in the city peaked.

Last year, he said, he sold about three cars a day. So far this year, he is selling only about three cars a week, a slump that he says has little to do with the global downturn.

Mr. Hassan expects sales to rebound now that the Iraqi government has finally approved a new budget after a drop in oil prices forced several revisions. Many of his customers for expensive cars are Iraqi businessmen with government contracts.

They had to wait for the new budget to get their money.

Gasoline prices throughout the Middle East are lower than in the U.S. and Western Europe. Iraq lifted fuel subsidies in 2004 and raised gasoline prices 19-fold. Since then, prices at the pump have been fairly stable.

Security -- not fuel prices or conservation -- had kept motorists off the streets.

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