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Back door to Russia: why car manufacturers are fleeing en masse to Kazakhstan

  • September 28, 2023
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Most companies present in the Russian car market are trying to gain a foothold in Kazakhstan for unclear reasons. Recently there was another report about another project in

Most companies present in the Russian car market are trying to gain a foothold in Kazakhstan for unclear reasons. Recently there was another report about another project in this direction: AVTOVAZ would resume production in this country. The AutoVzglyad portal tracked those who were ultimately helped by the “northern wind” blowing from Russia towards the Caspian steppes.

AVTOVAZ’s long-term plans were not hidden from the interested public by head Maxim Sokolov: “We expect that if the regulations necessary for this are adopted quickly enough, we will resume this production next year. But the volumes will be determined based on the recovery time frame and the market situation in the Kazakhstani market at the time the decision is made.”

This is not surprising: LADA cars were produced in Kazakhstan even before last year’s upheavals. SaryarkaAvtoProm’s assembly line produced Granta, Niva and Vesta, which were in high demand among poor Kazakhs due to their relatively low price. Expanding your own production and sales markets is almost always a good thing, and the desire to regain positions lost due to force majeure is not surprising.

Through the back porch

Much less obvious are the motives of other manufacturers, who do not even harbor dreams of expansion, but on the contrary consciously opt for a less spacious market, to their detriment. You don’t have to look far for examples. A month and a half ago, Kia quietly registered its subsidiary in Kazakhstan – Kia Russia and CIS in the Republic of Kazakhstan LLC. For a long time and persistently, Hyundai’s management tried to convince the United States that production in Russia was vital to the company, and begged for relent.

I didn’t convince or beg. I had to find a way to enter the house through the back door, which is not allowed through the front door. Soon we will be lucky enough to see how this ‘cunning’ adventure ends. However, we can say in advance that deceiving the Americans in such a simple way means that with a hundred percent probability we will face secondary sanctions.

By the way, this is not the first attempt by timid partners to eat fish and ride a motorcycle like a breeze – and the United States will not be upset and the profits will not be missed. At one time, the management of the Hyundai plant in Sestroretsk, which had been idle for almost a year, also planned to purchase a “new registration” and actively negotiated to move the enterprise to Kazakhstan. As you would expect, the adventure ended in vain.

But why are we all talking about Koreans and Koreans? Early this year, the Republic’s Minister of Industry and Infrastructure Development Kairbek Uskenbaev stated that the possibility of moving the Russian Toyota plant to Kazakhstan was being discussed. The dialogue would have taken place exclusively at the level of business projects, without the intervention of government agencies. Maybe it was executed, maybe it wasn’t, but the result was also expected to be zero.

Don’t replace Russia with Russia

Around the same time, the Kazakhstan Institute of Standardization and Metrology published the vehicle type approval for the Jetour X70, which was eagerly awaited in Russia. Maybe, but we don’t have it in abundance yet. A little later, the assembly of the Chevrolet Onix sedan began at the Kazakh SaryarkaAvtoProm plant, and Russian soil began to be filled with rumors that most of the new cars would go to us under the parallel import program. Here I would like to ask: has anyone seen the same “Onyx” on our roads?

At the same enterprise, as the Russian office of JAC told the AvtoVzglyad portal, the updated J7 liftback is being assembled. It has already arrived at dealers, but in insignificant quantities.

There was no other way. Kazakhstan, with its 20 million inhabitants and 42nd place in GDP according to the IMF, will never be able to replace Russia itself with Russia, which, according to the same indicator, ranks sixth according to the IMF and fifth according to the IMF. World Bank. Too different weight categories: in August 71,669 passenger cars were imported into our country, of which less than 2,000 were from Kazakhstan. For your information, we receive twice as many cars from six million Kyrgyzstan.

Victims of temptation

For once, AVTOVAZ’s intentions are clear and logical. The rest try in vain to find a quiet refuge in Kazakhstan, deceived by the apparent proximity of our two countries. But first of all, our southern neighbor does not have a sufficient workforce and a developed industrial base. And secondly, the country’s policy is, in principle, not very loyal to Russia. The country’s leaders have vowed to support the Americans for all their sanctions. Kazakh banks are increasingly not accepting payments in rubles from Russians. Kazakhstan is the only country in the post-Soviet space that refused to pay for gas in rubles.

Wow, the back door to Russia!

Photo from the manufacturer.
Photo autostrada.kz

AVTOVAZ’s long-term plans were not hidden from the interested public by head Maxim Sokolov: “We expect that if the regulations necessary for this are adopted quickly enough, we will resume this production next year. But the volumes will be determined based on the recovery time frame and the market situation in the Kazakhstani market at the time the decision is made.”

This is not surprising: LADA cars were produced in Kazakhstan even before last year’s upheavals. SaryarkaAvtoProm’s assembly line produced Granta, Niva and Vesta, which were in high demand among poor Kazakhs due to their relatively low price. Expanding your own production and sales markets is almost always a good thing, and the desire to regain positions lost due to force majeure is not surprising.

Through the back porch

Much less obvious are the motives of other manufacturers, who do not even harbor dreams of expansion, but on the contrary consciously opt for a less spacious market, to their detriment. You don’t have to look far for examples. A month and a half ago, Kia quietly registered its subsidiary in Kazakhstan – Kia Russia and CIS in the Republic of Kazakhstan LLC. For a long time and persistently, Hyundai’s management tried to convince the United States that production in Russia was vital to the company, and begged for relent.

I didn’t convince or beg. I had to find a way to enter the house through the back door, which is not allowed through the front door. Soon we will be lucky enough to see how this ‘cunning’ adventure ends. However, we can say in advance that deceiving the Americans in such a simple way means that with a hundred percent probability we will face secondary sanctions.

By the way, this is not the first attempt by timid partners to eat fish and ride a motorcycle like a breeze – and the United States will not be upset and the profits will not be missed. At one time, the management of the Hyundai plant in Sestroretsk, which had been idle for almost a year, also planned to purchase a “new registration” and actively negotiated to move the enterprise to Kazakhstan. As you would expect, the adventure ended in vain.

But why are we all talking about Koreans and Koreans? Early this year, the Republic’s Minister of Industry and Infrastructure Development Kairbek Uskenbaev stated that the possibility of moving the Russian Toyota plant to Kazakhstan was being discussed. The dialogue would have taken place exclusively at the level of business projects, without the intervention of government agencies. Maybe it was executed, maybe it wasn’t, but the result was also expected to be zero.

Don’t replace Russia with Russia

Around the same time, the Kazakhstan Institute of Standardization and Metrology published the vehicle type approval for the Jetour X70, which was eagerly awaited in Russia. Maybe, but we don’t have it in abundance yet. A little later, the assembly of the Chevrolet Onix sedan began at the Kazakh SaryarkaAvtoProm plant, and Russian soil began to be filled with rumors that most of the new cars would go to us under the parallel import program. Here I would like to ask: has anyone seen the same “Onyx” on our roads?

At the same enterprise, as the Russian office of JAC told the AvtoVzglyad portal, the updated J7 liftback is being assembled. It has already arrived at dealers, but in insignificant quantities.

There was no other way. Kazakhstan, with its 20 million inhabitants and 42nd place in GDP according to the IMF, will never be able to replace Russia itself with Russia, which, according to the same indicator, ranks sixth according to the IMF and fifth according to the IMF. World Bank. Too different weight categories: in August 71,669 passenger cars were imported into our country, of which less than 2,000 were from Kazakhstan. For your information, we receive twice as many cars from six million Kyrgyzstan.

Victims of temptation

For once, AVTOVAZ’s intentions are clear and logical. The rest try in vain to find a quiet refuge in Kazakhstan, deceived by the apparent proximity of our two countries. But first of all, our southern neighbor does not have a sufficient workforce and a developed industrial base. And secondly, the country’s policy is, in principle, not very loyal to Russia. The country’s leaders have vowed to support the Americans for all their sanctions. Kazakh banks are increasingly not accepting payments in rubles from Russians. Kazakhstan is the only country in the post-Soviet space that refused to pay for gas in rubles.

Wow, the back door to Russia!

Source: Avto Vzglyad

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