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Dealer Wins

Growing disposable incomes and a budding assembly industry are contributing to the success of dealerships across the country.

Auto sales were fast off the grid over the first five months of 2011, with official car dealers posting sales of 13,410 light vehicles and light commercial vehicles. Compared to the same period in 2010, this amounts to a growth rate of 105%. Growth in sales is attributable to an increase in demand for cars assembled in Russia and Kazakhstan, with cars originating from those destinations accounting for 64% of sales over the five-month period. In addition, imports from the far abroad and neighboring Uzbekistan accounted for 33.1% and 2.9% of domestic sales, respectively. The figures represent quite a coup for the industry in the face of the traditionally strong gray market, making total auto figures often difficult to determine.

Approximately 2,380 cars were assembled in Kazakhstan in the first five months of 2011, over five times higher than in 2010. Asia Auto produced 2,192 KIA, Chevrolet, Lada, and Skoda vehicles, while 295 SsangYong cars were produced by AgroMashHolding. In May 2011 a record number of light vehicles were sold—2,709. These figures from official car dealers showed growth of 10% over the previous month, and brought the market back to pre-crisis levels. Mercur Auto is a primary dealership network operating across the country, and is the official distributor of Volkswagen, Porsche, Mitsubishi, and Daewoo. Following dented sales over the global economic crisis, Kanat Akishev, Director of Mercur Auto, expects to fully recover in 2011. “In 2007 our company has sold more than 5,000 cars, and getting back to these figures is our target,” he told TBY. The premium sector is also expected to grow, further boosting the recovery, “In 2011 we expect to sell 80 Porsches, 140 Audis, and more than 1,000 Volkswagens. Additionally, we would like to make Volkswagen the number one brand in the country by 2015,” Akishev told TBY in an interview.

Additionally, the service and parts sector is also rising in tandem with increased sales, with companies such as CBC operating extensive service networks. It currently operates 40 service points across the country supplying IVECO, Bridgestone, Isuzu, and Komatsu products, and Volvo maintenance services.

The future also looks bright. In addition to natural growth, the termination of discounted customs tax rates on the import of used cars and the adaptation of Euro-3 standards will give a strong boost to the new car sales market. Small cars are also currently not viable in the market, with the majority of cars sold in the lower to upper class or in the SUV class. The segment does, however, offer new opportunities for the future. On the assembly front, Nissan has expressed interest in setting up an assembly plant as well as several Korean and Chinese Original Equipment Manufacturers (OEMs). Local production activities will also be boosted by the enactment of the Customs Union, although there is a long way to go when compared to regional auto manufacturing majors such as Turkey, Russia, and Iran.