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Kazakhstan 2015 | INDUSTRY | B2B: CARMAKERS

Automakers are increasingly looking to set up shop in Kazakhstan as a base for production thanks to a growing middle class and excellent opportunities for export.

Etsuo Hashino
ETSUO HASHINO
President
Toyota Motor Kazakhstan
Claude Coeslier
CLAUDE COESLIER
Délégué Général
PUEGEOT Kazakhstan

Why Kazakhstan?

ETSUO HASHINO It is not easy to pick just one factor for the automotive industry to come to Kazakhstan; however, in the case of Toyota, we simply produce a car for which demand exists. We carefully observe demand not just in the short term, but also in the long term. This is how we decide to begin production and sales in a specific country.

CLAUDE COESLIER The country is well suited for car production. Kazakhstan is far from Europe, customs fees play a major role, and in order to be competitive in terms of price, establishing the local production of our vehicles was the only way to maintain our competitive advantage. This edge allows us to sell cars like the Peugeot 301 with a price tag of $15,000 and it is our best seller in Kazakhstan. Without it, it would have been harder to penetrate the market.

What challenges exist in boosting capacities and sales sector wide?

EH It is difficult to measure the size of the market under the volatile market situation like now. In 2014 we revised our market forecast several times. The latest forecast was less than 160,000 units, which is slightly less than the previous year. Usually, toward the end of the year, sales in Kazakhstan increase; however, this year was totally different. After the devaluation in February, there was a small peak in March and April because every car maker tried to sell their stock at a discount using the old exchange rate. But from May 2014, there were seven consecutive months when the market was lower than the year before. Therefore, it is a very tough situation for us.

CC The current situation is challenging, mainly due to the high number of cars still imported from Russia. In light of the devaluation of the tenge, the performance of the sector in 2014 mirrored that of 2013—about 160,000 cars. For 2015 we anticipate about 195,000, but the January numbers are already down by 30% over 2014 and 40% down on 2013. We may have to revise our expectations. This is a consequence of the exchange rate between the ruble and the tenge. However, in the longer term, we anticipate the market rising to 300,000 units by 2020.

What are your short-term goals?

EH The most important goal for us is to meet customers' expectations. This is also one of the important mindsets of Toyota—always thinking about customers. We try to meet the customers' expectations and demands and that is the basis of our business attitude. Looking at the oil price reduction, the Russian ruble's depreciation, and the devaluation of the local currency, I think 2015 will be again tough for us. The figures are not easy to guess; however, I always keep customer satisfaction philosophy in my mind when I am doing business.

CC The main priority is our network, because it is not possible to reach our target of 2,000 with just four dealers. The first car will be produced by the middle of 2016, which means that 2015 is crucial, and we must finalize the design of the factory and find the suppliers. And after that, we must reach the sales target. We cannot do that without having a solid network of dealers, as well as the highest quality of both service and people.