Astana Motors ramps up Hyundai production and brings leading brands of auto giants to the domestic market
Astana Motors has Hyundai as a top brand in its portfolio. Astana Motors’ Hyundai Trans Kazakhstan plant in Almaty made 20,680 cars for the domestic market in the past nine months and will produce another 10,000 cars for Kazakhstan buyers by the end of the year. In 2023, Hyundai Trans Kazakhstan plans to make 40,000 cars for the domestic market.
Hyundai sales in Kazakhstan reached 20,334 units since the start of 2022, up 14.5% compared to the same period in 2021 (17,748 units). Dealers across the country will sell about 29,000 Hyundai cars by the end of this year, up 27% versus 2021. In 2023, 38,000 Hyundai cars are planned to be sold in the Kazakhstan market.
Hyundai CKD production
Since the start of its operations a year and a half ago, Hyundai Trans Kazakhstan has set up completely knocked down (CKD) production using welding and painting for two models – the Hyundai Accent and the Hyundai Tucson. Astana Motors is now negotiating with Hyundai Motor Company (South Korea) for introducing CKD production of another model manufactured by the plant. The results of the negotiations will be announced in the second quarter of 2023.
Plants for the production of car components
Astana Motors is currently in the design phase for the construction of three plants on a 10 ha site in the Industrial Zone of Almaty. Together with foreign partners Youngsan, Motrex, and Norplast with expertise in the production of car components abroad, the plants will make car seats, polyurethane mats, fender liners, mudguards, and multimedia systems for Hyundai cars.
The project received $15 million in investments. With production facilities on an area of 9,500 square meters, the plants will create 175 jobs and are scheduled to start operations in the first quarter of 2024.
Multi-brand plant for the production of Chinese car brands Haval, Chery, and Changan
Astana Motors’ global goal is to increase the local content in the produced cars. To scale up production, Astana Motors is starting to build a plant for producing cars of three leading Chinese auto giants: Changan – No. 1 in China in terms of production volumes, Chery – the leader in exports in China, and Haval – a brand of Great Wall Motor ranked fourth in sales in China’s market.
The plant will be able to make 90,000 cars per year using welding and painting, with 60% to be exported to the CIS countries.
The project will receive $200 million in investments. The plant will have an area of 28 hectares. The area of industrial facilities will be 100,000 square meters.
The plant will create over 2,200 new jobs, with operations scheduled to start in the fourth quarter of 2024 or the first quarter of 2025.
“The multi-brand plant will produce nine models of three Chinese brands using CKD assembly with body welding and painting. The plant will produce new models at the beginning of their life cycle, that is the models will be launched in production as they enter the world market. So we will launch the production of nine models using welding and painting within a few years after the plant opening,” said Beknur Nesipbaev, the CEO of Astana Motors.
He also added that the production volumes of the Hyundai Trans Kazakhstan plant and the new multi-brand plant make it cost effective to produce large volumes of components, including stamping of metal parts, which, in turn, deepens localization.
The creation of a technopark in the Industrial Zone of Almaty will promote the development of small and medium businesses in Kazakhstan and foster qualified engineering personnel.
The global car market is facing the most severe crisis in history. The geopolitical situation has greatly worsened the shortage of semiconductors and logistics problems. Major automakers around the world continue to cut down production. For example, sales of Hyundai cars in South Korea dropped 12.7% over the first eight months of 2022 year-on-year, and the waiting time for a Hyundai car is 2 to 2.5 years. In Europe, customers wait for their cars of various brands for about two years.
The new car market in Kazakhstan holds its positions despite the difficulties. From January to September 2022, 86,959 units were sold in this country versus 86,611 units in 2021 (+0.4%) (AKAB data).
“In the globalization environment, we depend on the state of affairs in the world market and adjust our plans just as other manufacturers do. To date, we have reached agreements with partners on new routes for the supply of components for a number of Hyundai models and continue to work in this direction,” explained Beknur Nesipbaev. “Astana Motors is ramping up production and import volumes to meet the domestic market demand. Since 2021, we have brought to the Kazakhstan market three Chinese car brands – Haval, Chery, and Changan, which are popular worldwide, and are actively developing their dealer networks in Kazakhstan,” said the CEO of Astana Motors.
Haval
Astana Motors has officially represented the Haval brand since April 2021, as part of a distribution agreement with Great Wall Motor (PRC).
By the end of this year, the distributor plans to achieve sales of 2,000 cars, and for 2023 the company has ambitious plans to sell more than 10,000 Haval cars and expand its dealer network up to 21 car centers.
Chery
The official distributor of Chery, also part of Astana Motors, has represented the brand since October 2021, as part of a distribution agreement with Chery Automobile Company (PRC). Sales of Chery crossovers in Kazakhstan started in December 2021. With 2,469 cars sold, the brand became the leader among Chinese brands in our country in less than a year.
Today, Chery ranks fifth among the top 10 most popular car brands in Kazakhstan.
Chery plans to sell about 4,000 units this year and over 9,000 units in 2023.
Changan
In August 2022, Astana Motors signed a distribution agreement with Changan International Corporation (PRC) and was authorized to officially represent the Changan brand in Kazakhstan.
In October, sales of the first batch of cars delivered by the authorized distributor started. The distributor plans to sell 500 Changan units by the end of this year and over 8,000 cars in 2023.
BMW
The geopolitical situation last February caused a disruption in the supply chains from Europe, and BMW cars could no longer be deliverd over the old routes.
Astana Motors negotiated with its partner for the delivery of BMW cars to Kazakhstan over several new routes. The authorized BMW distributor in Kazakhstan has already received the first batch of cars delivered over the new route.
The distributor expects Kazakhstan dealers to sell 1,000 BMW cars this year. In 2023, the company plans to sell 1,500 cars.
Subaru
The authorized distributor Subaru Kazakhstan will sell about 700 cars in 2022 and 1,200 units in 2023.
Jaguar Land Rover
The geopolitical situation also affected the operations of Jaguar Land Rover’s authorized distributor in the Russian Federation. The brand closed its headquarters in Moscow. It resulted in problems for Kazakhstan dealers with the supply of cars and spare parts.
Astana Motors negotiated with the brand’s office in the UK for six months and was authorized to officially represent Jaguar Land Rover in Kazakhstan as a distributor of British Motors Kazakhstan (a subsidiary of Astana Motors).
In January-February 2023, the authorized distributor in Kazakhstan will start deliveries of Jaguar Land Rover cars, about 300 units totally in 2023.
Thus, despite the shortage of semiconductors and logistical problems, the production volume of the Hyundai Trans Kazakhstan plant and the sales volumes of cars from Astana Motors’ portfolio show a positive trend.