State support for preferential lending
According to analysts of the Association of Kazakhstan Automotive Business, government support not only in the form of preferential car loans, but also the NATR state program to help purchase equipment, have a very high impact on the sustainability and development of the automotive industry in Kazakhstan.
Thanks to government support in the form of the Development Bank of Kazakhstan and its preferential lending program at 4%, since its inception, 7 Kazakhstanis have been able to purchase domestically produced cars worth 904 billion 28 million tenge. Of these, 700 second-tier banks issued 6 loans for the purchase of vehicles from domestic automakers for a total amount of 7 billion 633 million tenge.
At the end of August 2016, 32,03% of new car sales came from domestic manufacturers. Since the launch of the preferential lending program (from May 2015 to August 2016), 18662 units have been sold. domestically produced cars. Program sales account for 41% of total sales.
To date, almost the entire allocated amount has been fully utilized by the factories.
The AllurGroup Group of Companies (Saryarka AvtoProm JSC and Agromashholding JSC) accounts for 57,3% (13700 units), and Asia Auto accounts for 47,3% of the total amount (12300 units).
Since repayable funds are used to issue new loans, the coverage of the program will only grow.
AKAB expects increased interest from Kazakhstanis after the introduction of recycling certification. Together with the preferential lending program, the certificate for even one surrendered car will be enough to cover the down payment on budget models.
(The gradual decline in the share of preferential car loans in the structure of total sales of Kazakhstani cars occurs as a result of the exhaustion of the main allocated amount.)
According to ACAB analysts, interest in models in the budget segment will increase, since due to increased localization, prices for domestically produced cars will be more stable compared to imported cars, which will make it possible to plan long-term purchases.
In 2016, AKAB member companies carried out the following work to develop their own automotive industry: Hyundai entered export markets, the Semaz plant supplied welding and painting to bodies, Kostanay factories were in the process of implementing a large global CKD project: welding, painting of Peugeot cars, Jac cars , which attracted new investors from China, a license agreement was signed for the production of Ankai in Kazakhstan, which will allow us to expand our range.
As for domestic manufacturers, it is obvious from the results that focusing on the budget segment was the only correct strategy that made it possible to preserve the domestic automotive industry.
The budget segment initially has a small margin, which is expected to be compensated by increasing volumes.
The Kazakhstan Automotive Business Association notes the formation of the following trends in the Kazakhstan market:
- Kazakhstanis increasingly prefer the budget segment of cars, primarily for domestically produced cars
- Kazakhstanis are ready to accept new brands on the market if they are Kazakhstan-made cars
- Kazakhstanis are interested in sales promotion tools, lending and installment plans.
- Kazakhstanis are increasingly interested in efficiency, design, equipment, level of comfort and safety when choosing a car in the budget segment. A consumer culture is actively being formed. Therefore, there is a tendency to change the traditional sales leader.
- Already, domestically produced cars account for more than 30% of total sales, which is twice as much as last year. So in the future, domestic cars have every chance of becoming dominant in the Kazakh market.
To prepare additional materials, interviews, articles, please contact Assol Mirmanova, pr@akab.kz, + 77072120123