Kazakhstan's car industry asks state to help with access to Uzbek market
The Kazakh car industry requires pre-export financing of foreign supplies and a number of subsidies from the state in order to enter the Uzbek market, said Oleg Alferov, head of Kazakhstan’s Union of automotive industry enterprises KazAvtoProm.
“There are prospects for realizing the potential of our industry in Uzbekistan. But there are barriers of an internal character. They are associated with the need to reduce transportation and certification costs. Solving these problems requires comprehensive support of the state. We are talking about pre-export and export financing of foreign supplies, subsidizing transportation, insurance of these supplies and receivables,” he said.
All these instruments are now being implemented in Russia, according to the head of the union.
“They could be used in Kazakhstan. And we advocate that this experience has been realized in our country. It requires state support for the implementation of export supplies, without it, in significant volumes, access to foreign markets is hardly possible,” he stressed.
In the first half of 2018, more than 14,600 vehicles were produced in Kazakhstan.
Kazakh automakers have been eyeing Uzbekistan for several years in anticipation that the country will open borders for exports.
Progress was outlined in the autumn of last year, when business liberalization began in Uzbekistan. Uzbekistan reduced the excise tax rate for new vehicles manufactured and imported from Kazakhstan since October 1, 2017. Under the document, the excise tax rate for new vehicles manufactured and imported from Kazakhstan (other than those intended for medical purposes) was reduced to 2 percent of the customs value.
Earlier, Kazakh automakers complained to Uzbek National Economy Minister Timur Suleimenov that since 1996 the enterprises of the Uzbek automobile industry exported to the Kazakh market more than 85,000 cars worth $720 million. Cars of Uzbek manufacturers are not subject to customs duties and excises when crossing the border of Kazakhstan. However, supplies of Kazakh automotive equipment to the Uzbek market equaled to zero as the access is blocked by harsh customs and tariff barriers.
KazAvtoProm suggested then to consider the possibility of introducing response measures in relation to Uzbekistan.
The union asked the ministry to find negotiating opportunities for revising the Uzbek tariff policy in relation to Kazakh car industry products and assist in organizing its access to the Uzbek market in accordance with the principles of free competition.
Previously, media reported that production of trucks and buses Hyundai, as well as special vehicles will be established in Namangan, Uzbekistan. Within the framework of the project, Evergreen Motors Group planned to assemble trucks with carrying capacity from 1 to 50 tons, as well as intercity, international and tourist buses, special vehicles.