Abstract <p>This article analyzes the situation at the market for automobiles in Azerbaijan and covers the period from 1978, when the first manufacturing facilities for making special-purpose vehicles were launched, until 2024<i>.</i> This study aims to identify key stages and factors, which have affected the development of the Azerbaijani market for automobiles, and further prospects of its development<i>.</i> In this study, the PESTEL analysis and the SV matrix are used as tools for determining the level of domination at the market<i>.</i> According to the study results, government initiatives (tax incentives for local manufacture and restrictions on importing used automobiles) and changes in consumer preferences have contributed to the growth of local manufacture and to a rise in the number of automobiles per capita. Regional differences in the number of automobiles per population size are revealed, which reflects its economic variety within the country. Competitive analysis methods have allowed determining that, in terms of type, the market in Azerbaijan is a natural oligopoly, which indicates the presence of several dominant players<i>.</i> The article identifies the main market restrictions and the potential for developing the domestic automotive industry of Azerbaijan. The study results can be used to elaborate strategies for supporting the national automotive industry and encouraging the demand for local brands as well as for managing competition, supporting local brands, and ensuring the sustainable development of the industry as a whole<i>.</i></p>