BMI View: BMI holds an optimistic outlook on auto production and sales in Kazakhstan and Uzbekistan. Both countries boast solid macroeconomic fundamentals and both are seeing strong demand for cars from their citizens.
Turning to production first, Kazakh auto production looks set for strong growth over BMI's five-year forecast period to 2017. This reflects new production plans by three carmakers; Japan's Toyota Motor, France's PSA Peugeot Citroen and Russia's AvtoVAZ.
Toyota announced its new production plans in February 2013. At that time, the automaker stated that it plans to commence production of its Fortuna SUV in Kazakhstan from late 2014. Following investments totalling some US$35mn, local plants will begin painting, welding and assembling completely knocked-down (CKD) versions of the vehicle. Production, which will start at around 3,000 units annually and may rise in the future, will be for both the domestic and export markets.
In March 2013, French auto manufacturer PSA Peugeot Citroen announced that it is to assemble cars in Kazakhstan in partnership with Russian company Agromash Holding. From June 2013, the site was to assemble Peugeot 301, 3008 crossover sport-utility vehicle (SUV), 508 sedan, and Partner commercial van models. Output will initially be 4,000 units, eventually increasing to 10,000. The units will be produced in France, where it will add 300 jobs, but assembled in Kazakhstan, where it will add 150 jobs.
Toyota and Peugeot's plans follow the 2012 announcement by Russian auto manufacturer AvtoVAZ that it is to establish a joint venture (JV) with Kazakhstan companies AziaAvto and SEC in Ust-Kamenogorsk. AvtoVAZ will also reportedly invest US$400mn in Kazakhstan production. Under the agreement, vehicle production of 60,000 units per year will start in 2015. There are plans to increase annual capacity to 120,000 vehicles at a later stage.
For Uzbekistan, despite the problems posed by an ongoing trade dispute with Ukraine, BMI is...