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Chinese carmakers are seizing market share in Kazakhstan amid shortages of cars and parts from Russia due to sanctions.
Astana Motors, a dealer with outlets across the country, announced last week it would soon begin importing units from Chongqing-based manufacturer Changan. Under the August 11 distribution agreement, Changan cars will start arriving in Kazakhstan directly from Chinese factories as early as September.
"It is an honour for us to represent China's oldest and at the same time one of its most progressive automobile brands," Astana Motors said in a press release.
Chinese brands have been making steady inroads in Kazakhstan.
Budget-automaker Chery entered the Kazakh market late last year. By July, with its attractive financing plans, it had become one of the top 10 most popular cars on the market, according to the Association of Kazakhstan Automobile Business (AKAB), a lobby group. The more expensive Haval arrived in April 2021. Jac and Lifan have already been on the local market for a few years, with Jac being assembled in Kazakhstan's northern Kostanai region.
According to AKAB, Chinese brands accounted for 3.4% of new cars sold in Kazakhstan in 2021, or more than 4,000 units, doubling the figure from the previous year. In the first seven months of 2022, four Chinese makes have already sold the same number of units as they had in all of 2021.
The growth appears driven not only by competitive prices, but also by advertising campaigns designed to combat widespread scepticism about the quality and safety of Chinese goods.
Kazakh customers also face little choice these days. Popular Japanese and European brands are simply not available. Many models were manufactured in Russia, where factories have been forced to suspend production due to international sanctions over Moscow’s war in Ukraine. That has caused an acute shortage of cars and spare parts in Kazakhstan.
Toyota Center Jetysu, an Almaty dealer of one of the most popular brands in Kazakhstan, told Eurasianet that it had suspended sales indefinitely due to a factory shutdown in St Petersburg.
In addition, Russian authorities have banned the export of many types of spare parts, causing prices to soar.
Kostanai-based SaryArkaProm – which assembles Chevrolet and Kia vehicles with parts imported from Uzbekistan and Russia and the Chinese Jac with parts imported from China – enjoys the largest market share in Kazakhstan. The share was at about 60% before the Ukraine war. The company said it is continuing to manufacture cars, but it refused to answer questions. It is unlikely that production has not been impacted.
Alexei Alexeyev, editor-in-chief of the Almaty-based automobile magazine Za Rulem, told Eurasianet that manufacturers from Europe have rerouted cargoes through Turkey, bypassing Russia, which has significantly increased shipping times and costs.
"Scheduled maintenance, which involves a simple change of oil, filters and spark plugs on my Volkswagen Tiguan has risen [in price] by 2.5 times this year to 192,000 tenge [$400], which is incredibly expensive," Alexeyev said. “The crisis is unlikely to end soon, we can only hope for a supply of parts from China."
Chinese firms appear eager to fill the vacuum. Delivery of cars takes no more than 18 days; spare parts arrive in about a week, according to a Chery distributor.
Alexeyev believes that, if the war-related shortages persist, Chinese producers will continue to increase sales in Kazakhstan, eating away at the share long enjoyed by Russia.
Local dealers are preparing for that eventuality. Nurlan Shamgonov, director of First Motor Group, the official distributor of Chery in Kazakhstan, said at an August 15 press conference in Almaty that in the next five years Chinese brands will take a leading position on the domestic market.
"This is not due to price dumping, but due to quality and options," Shamgonov said. "Now there is already a breakdown in [consumers'] minds, they believe in the Chinese brand.”
Buyers, however, are more likely to feel forced.
"I'm looking for a car I can afford," a visitor to a Chery dealership in Almaty, who called himself Yerlan, told Eurasianet. “Here I find the most suitable conditions: A good price and a loan for up to 10 years.”
Correction: SaryArkaProm no longer assembles Hyundai. It has switched to assembling models for Hyundai's daughter brand, Kia.
Almaz Kumenov is an Almaty-based journalist.
This article originally appeared on Eurasianet here.
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