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The Association of Kazakhstan Automotive Business (AKAB) summed up the results of 2018. In general, according to the vice-president of the Association Anar Makasheva, the past year was successful for the domestic car market: 60,9 thousand new passenger and commercial vehicles were sold worth 546,8 billion tenge, which is 24% more than in 2017.
The industry has overcome several important “thresholds”: for the first time in 2018, the share of imports dropped below 50%. Every second car sold is made in Kazakhstan. And the share of the automobile industry in the mechanical engineering industry was 19,2%. “In 2017, this figure reached 16,4%. This is the largest increase in the share in the mechanical engineering industry compared to last year - 2,8%,” Makasheva emphasized.
Manufacturers expect even greater growth in 2019. First of all, we are talking about deepening localization in production. According to AKAB President Andrey Lavrentyev, it will be possible to reach the level of 50% of the industry in 2020.
“In general, we have achieved 30% localization for passenger cars; Kazakhstan has achieved 50% localization for commercial vehicles and buses. It remains to achieve about 20% additional localization in terms of auto components and spare parts for passenger cars. According to our internal estimates, we will achieve them in 2020,” he is confident.
Speaking about the market prospects, Lavrentiev noted that the main players in the Kazakh automobile industry have already been identified; existing companies will deepen and expand production, as well as the global automotive industry in general. The head of ACAB recalled that a few years ago there were discussions about the decline of this sector on the world stage, even the maximum market size was mentioned - more than 80 million cars.
“But we see continued growth. And now the figure of 85 million annual car production has already been overcome, even taking into account the global crisis: developing countries are actively increasing their vehicle fleet, so we do not expect a decline in the global automotive market as a whole, and in production, respectively,” he says.
However, the global trend is such that in the segment of inexpensive cars pressure is felt from Chinese manufacturers, whose share already accounts for about 30% of global production. “We see that Chinese major players are beginning to actively look at the historical markets - American, European. The redistribution here will be quite serious in the next five years, and we will witness how acquisitions and mergers happen with historical brands,” says the head of AKAB.
As for the Kazakh market and the market of the CU countries, Andrey Lavrentyev also touched upon one of the important topics of the past year - the signing of an agreement on the development of the automobile industry in the Republic of Kazakhstan between strategic investors, the transnational Genertec Holding, JAC Motors and the Kazakh automaker JSC Allur Group of Companies. The speaker said that the entry of such large, influential enterprises into the industry became possible thanks to the bilateral relations between China and Kazakhstan, the One Belt, One Road program and the active actions of the Governments of both countries in the development of industrial cooperation. Cooperation between the companies will help solve the main problem - deepen localization, establish production of auto components, open consumer access to new models in an affordable price segment, and develop foreign markets.
Another trend is the development of the market for electric vehicles and infrastructure for them. “The global auto industry has already decided on electric transport as a separate large branch of production,” Lavrentyev noted. In Kazakhstan, this direction is also promising, but manufacturers emphasize that it is impossible to do without government support measures. The head of AKAB gave examples of cooperation with a number of akimats on the transition of public transport to electric transport: within the framework of concluded agreements, domestic manufacturers will supply electric buses, and the necessary infrastructure is being created.
“We, as AKAB, have prepared, together with the Ministry of Industry and Infrastructure Development, a roadmap in which we proposed several things for the development of electric transport. The first is the development of infrastructure, the installation of gas stations, either at the expense of the manufacturer or through investments. The second is free charging for a year and a half, as an incentive. The third is dedicated lines, so that the electric car has a special number and moves along dedicated lines, like a taxi. In big cities this is a unique thing. Parking preferences. So that they can see that an electric car is a priority. This is supported and stimulated by the government, because the environment in large cities is in a terrible state,” said Lavrentiev.
The Kazakh auto industry, according to him, sees its task for 2019 as ensuring market transparency. “I mean working with official dealers, this is a more open and transparent business, building more dealership centers, developing service centers and being close to the client,” Lavrentiev explained. According to ACAB forecasts, in 2019 sales growth is expected to reach 70 thousand units of new passenger and commercial vehicles.
Toyota Motor Kazakhstan President Keith Simmons believes that growth in the Kazakhstan car market will continue in 2019; he estimates the total sales volume at approximately 68-69 thousand units. “For various economic reasons, growth in the car market is not expected to be as large as before, but in general it is quite high, including in the premium segment. Regarding our brands, we expect growth for Toyota in 2019 to be about 15%, and for the Lexus brand – about 10%,” he shared.
Executive Director of KMK Astana Motors Beknur Nesipbaev noted that based on sales results in 2018, the company’s total sales reached 14519 units, an increase of 69%, and the company’s market share in the passenger car sector reached 26,5%. In his opinion, the Trade In segment, which is gaining popularity literally every year, is also promising.
“We started developing this area in 2016 and sold 230 cars, but already in 2017-2018 there was great growth. In 2018 - 2400 cars, and for 2019 we set a plan of 3000 cars,” Nesipbaev said.