China's Strategic Transformation: Central Asia Emerges as a Key Automotive Export Region
Revamped Road Trip: Uzbekistan's Electrifying Automotive Adventure
Following his political jaunt in China, Uzbekistan's President Shavkat Mirziyoyev hightailed it through Shenzen, making a pitstop at the headquarters of BYD, the globe's electric vehicle (EV) powerhouse that recently dethroned Tesla.
This encounter marked the beginning of an exciting chapter for Uzbekistan's automotive industry. Alongside BYD's CEO, Wang Chuanfu, Mirziyoyev witnessed the remote launch of an assembly plant for hybrid and EVs in Jizzakh region. With an annual production capacity of 50,000 units, this was just the tip of the iceberg.
Mirziyoyev envisioned an ambitious expansion of model varieties for the Jizzakh plant in the near future, aiming to ramp up production to a staggering 300,000 units per year. The groundwork for this visionary project had been building for years. The initial agreement between BYD and the Uzbek government-owned car company, UzAuto, was inked in August 2022, earning the title of BYD Uzbekistan Factory. The deal solidified in October 2023, with an investment agreement signed by both parties.
Expectations are high for the yet-to-be-built plant, with the joint venture allowed to export BYD vehicles manufactured in Uzbekistan to Central Asian countries. Russia, too, could potentially join this elite consumer club.
In a symbolic gesture during his visit to Shenzen, Mirziyoyev was ceremoniously handed the keys to a YangWang U8, a luxurious BYD SUV retailing around $150,000, perhaps a hint at the potential diversification of production.
While the price tag might deter Uzbek buyers, demand in Russia for this model sparked a buying frenzy. BYD announced its intention to launch the YangWang U8 in Russia in September, racking up staggering pre-orders for 4,000 units within a week, a number that soared to over 30,000 by the month's end.
BYD is not the only Chinese automaker setting up shop in Uzbekistan. Roodell, a Uzbek vehicle distribution company, teamed up with the Wuhu-based Chery Automobile in September 2022, dubbing their joint venture in Jizzakh. When the cars hit the market the following month, Chery offered customers preferential loans to manage prices ranging from $26,000 for their Tiggo 7 Pro to $40,000 for the Tiggo 8 Pro Max. Others, like Kazakhstan, have seen their fair share of Chery models, with over 7,000 units sold in the first seven months of 2023.
Astana Motors, an auto dealer in Kazakhstan, made a bold move in November 2022 by announcing plans to build a plant that would eventually produce models by Chinese automakers such as Chery, Changan, and Haval. The plant boasted a design capacity to produce over 90,000 units per year, with operations slated to commence in the fourth quarter of 2024.
Central Asia has become a hotspot for Chinese automakers, with large-scale, electric-focused joint ventures taking shape. Russian car market analytics company Avtostat revealed in December that Kyrgyzstan had exported 60,000 cars to Russia since the start of 2023, indicating that a significant portion of newly imported Chinese vehicles may have transited through Central Asia.
However, this lucrative re-exporting market could face adversity, with Russia's relaxed rules for imported vehicles set to expire soon. Chinese automakers with a presence in Kazakhstan and Uzbekistan, fortunately, have contingency plans in place.
Behind the Scenes:
- Uzbekistan's EV Ambitions: The Uzbek government is pushing for a transformative shift towards electromobility, aiming to produce half a million electric and hybrid vehicles between 2024 and 2030[1]. To fuel this mission, they plan to invest $160 million in new factories and create an infrastructure program to expand charging stations across the country[1].
- Kazakhstan's Growing Interest: Although there is no specific mention of joint ventures with Chinese automakers for EV manufacturing in Kazakhstan, the country is experiencing a surge in electric vehicle adoption, driven by affordable Chinese models[1].
[1] Enrichment Data from UBSevens.news, "Chinese Companies Ramp Up Production in Central Asia as the Region Embraces Electromobility" (March 2024).
- The Uzbek government's auto industry is undergoing a revolution, with ambitious plans to transition towards electromobility, aiming to produce half a million electric and hybrid vehicles between 2024 and 2030.
- To achieve this goal, Uzbekistan plans to invest $160 million in new factories and create an infrastructure program to expand charging stations across the country.
- News about Kazakhstan's growing interest in electric vehicles suggests a surge in adoption, driven by the availability of affordable Chinese models.
- In a strategic move, a Kazakh-based auto dealer, Astana Motors, announced plans to build a plant that would produce models by Chinese automakers like Chery, Changan, and Haval, with a design capacity to produce over 90,000 units per year.
- The focus on electric vehicles and the establishment of new assembly plants in Central Asia could potentially reshape the regional automotive industry, with Chinese automakers positioning themselves for potential growth in the business, finance, and technology sectors.
