Tag Archives: automobiles

Economic crisis wipes out Kazakh car-making industry

APRIL 15 2016, ALMATY (The Conway Bulletin) – A sharp economic downturn and a 40% overvaluation of the tenge last year combined to destroy Kazakhstan’s car making industry, new data showed.

The Kazakhstan Automobile Business Association (AKAB), an industry lobby group, said that in the first three months of 2016 Kazakhstan produced 428 cars, a fraction of the 12,450 cars produced a year earlier.

The data highlights the plight of the car making industry in Kazakhstan, which had once been held up as an example of how the country’s industrial base can modernise.

There are three car factories in Kazakhstan – AziaAvto, Saryarka AvtoProm and Avtomashholding. Between them they make cars for Lada, Kia, Chevrolet, Skoda, Hyundai, SsangYong and Peugeot.

None of the three car factories replied to Conway Bulletin requests for comment.

A general economic downturn was exacerbated last year by a disparity between the price of the tenge and the rouble until mid-August, when the Kazakh Central Bank finally allowed its currency to devalue. Between January and the devaluation, the tenge, propped up by the Central Bank, was around 40% over-valued against the rouble.

This had two effects. Kazakhs headed north to buy their new cars from Russian dealerships, undermining domestic sales, and exports to Russia collapsed.

MPs also said a $3,000 registration fee introduced at the beginning of this year on cars built in 2015 has deterred people from buying cars. It was introduced to re-coup lost revenue from Russian cars sold to Kazakhs in 2015.

Car showrooms around Almaty lie empty. There are simply no customers. Markhaba and her family have been considering buying a new car. She explained why they still haven’t one.

“The price of new cars in tenge increased by 20% to 30%, and we are still considering whether we really need to buy one or not.” she said.

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(News report from Issue No. 277, published on April 22 2016)

Kazakh car-makers complain

APRIL 12 2016 (The Conway Bulletin) – Car makers in Kazakhstan said they are struggling to sell their new cars in the domestic market due to new registration fees. On Jan. 1, a new tax of 106,000 tenge ($317) was imposed on cars built up to three years earlier, while a 1m tenge ($3,170) fee was imposed on older cars. Industry data showed around 4,500 cars produced in the second half of 2015 have not sold.

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(News report from Issue No. 276, published on April 15 2016)

Vital car sales to Russia start to grow for GM Uzbekistan

APRIL 13 2016 (The Conway Bulletin) – Sales of GM Uzbekistan cars to Russia recorded their second consecutive monthly increase, raising hopes that the car-making industry in Central Asia has reached a turning point and pulled away from the low it hit in January.

If data next month shows another monthly increase in GM Uzbekistan’s sales to Russia, it will be the first time since September 2013 that the biggest car manufacturer in Central Asia will have recorded three months of con- secutive growth.

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(News report from Issue No. 276, published on April 15 2016)

Kazakh President’s nephew invests in cars

APRIL 4 2016 (The Conway Bulletin) – Automotive holding Allur Auto and Alatau Invest Capital agreed to form a partnership to expand the Kostanai car assembly plant and to create a national brand for Kazakh cars. Alatau is a new financial group owned by the eldest nephew of Kazakh President Nursultan Nazarbayev, Kairat Satybaldy. Earlier in February, the company signed an agreement with Kaspi Bank and Baring Vostok to invest in the IT and financial sectors.

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(News report from Issue No. 275, published on April 8 2016)

Uzbekistan to produce new Chevrolet

MARCH 11 2016 (The Conway Bulletin) – Uzavtosanoat, part-owner of the GM Uzbekistan joint venture, said the company will start production of Chevrolet Aveo in May. GM Uzbekistan, formerly UzDaewooAuto, produces several models of cars for the US manufacturer GM. The company said the Aveo will help its market share in the former Soviet Union and, possibly, open new export avenues in the Middle East and Africa.

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(News report from Issue No. 272, published on March 18 2016)

Business comment:

MARCH 11 2016 (The Conway Bulletin) – Kazakhstan is AvtoVAZ’s largest export market but a duty introduced at the start of the year by the Kazakh government to support its car making industry, has, apparently, destroyed it.

The number of AvtoVAZ cars delivered to the country jumped in 2015 due to the tenge-rouble currency imbalance for the first part of the year.

From the end of 2014 the rouble started collapsing, but the Kazakh Central Bank stubbornly kept the tenge at 185/$1.

This made imports very cheap, undermining Kazakhstan’s own carmaking industry but boosting AvtoVAZ.

In the first half of 2015, car sales were down by one-third. For the year, sales were down 40% to 97,446 units, the lowest level since 2012.

Even President Nursultan Nazarbayev weighed in and said that it was wrong for Kazakhs to buy cheaper products abroad and push the domestic industry out of the competition.

The Kazakh government also looked into subsidising the local automotive sector and impose import duties — an issue that must surely have raised concerns for both the World Trade Organisation and the Eurasian Economic Union.

The new $2,000 car import tax has also had an almost immediate effect. It has made imports unsustainable. It has simply priced them out of the market, denting consumer choice and, also, Kazakh- Russian relations.

Kazakhstan and Russia are supposed to be allies. The Eurasian Economic Union, a Kremlin project, was supposed to protect the area from interventionist duties. Where was it when Kazakhstan said it was going to impose its $2,000 import levy on car imports.

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(News report from Issue No. 271, published on March 11 2016)

AvtoVaz cuts exports to Kazakhstan

MARCH 10 2016 (The Conway Bulletin) – Russian carmaker AvtoVAZ has stopped exporting finished cars to Kazakhstan due to the introduction of new customs duties, Vedomosti reported quoting a source close to the company. The new taxes, introduced this year, increase the overall average price of an auto- mobile by $2,000. Instead, AvtoVAZ will expand its exports of car parts to its factories in Kazakhstan. This was confirmed to Kazakh media late on Thursday by an AvtoVAZ spokes- person.

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(News report from Issue No. 271, published on March 11 2016)

GM Uzbekistan sales fall

FEB. 10 2016 (The Conway Bulletin) – GM Uzbekistan sold 1,269 cars in Russia in January, down 37% on the same period in 2015, media reported quoting the Automobile Manufacturers Committee of the European Business Association which releases data on sales. Russia is GM Uzbekistan’s main market. GM Uzbekistan is important because it is one of the few relatively successful projects with Western business in Uzbekistan. Low oil prices have caused a recession in Russia which has impacted the rest of the region.

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(News report from Issue No. 267, published on Feb. 12 2016)

Car sales drop in Kazakhstan

JAN. 11 2016 (The Conway Bulletin) — The Association the Kazakh Auto- mobile Business said authorised dealers in the country sold cars worth $1.9b in Jan.-Nov. 2015, about 43% less than than the same period last year. The Association also said that sales of cars produced in Kazakhstan fell by 50% to around $355m.

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(News report from Issue No. 263, published on Jan. 15 2016)

GM prices up in Uzbekistan

DEC. 15 2015 (The Conway Bulletin) — GM-Uzbekistan, General Motors car-making venture in Uzbekistan, increased retail prices across its product line by up to 30%, the podrobno.uz news agency reported. Like the rest of the region, Uzbekistan has been facing a devaluation in its sum currency while inflation has increased.

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(News report from Issue No. 261, published on Dec. 20 2015)