Central Asia is gaining more and more importance for the automotive industry – both as a sales market and production site. Chinese brands are making their way into the local market. The expansion of regional production facilities is picking up speed, and with it the region’s importance as a hub between East and West.
Made up of Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan, Central Asia is increasingly coming into the focus of the international automotive industry. Home to over 80 million people, the region is one of the world’s emerging markets. Kazakhstan is not only the largest automotive market in the region –with around 200,000 new registrations in 2023– it is also a growing centre of car production. The Allur Group plays a particularly important role here. Its plant in Kostanai assembles vehicles for brands such as Chevrolet, JAC, Chery, Kia, and Hyundai. Local production covers around 70 per cent of the domestic market. The industry is supported by the duty-free import of parts, tax concessions, and strategic partnerships with Chinese original equipment manufacturers (OEMs), among others.
At 36 million inhabitants, Uzbekistan is not only the most populous country in Central Asia, but has also traditionally been the region’s industrial heartland. The state-owned company UzAuto Motors (formerly GM Uzbekistan) dominates the passenger car market, holding a market share over 90 per cent. It manufactures Chevrolet models such as the Cobalt, Nexia, and Tracker, which are largely based on former General Motors platforms.
Production takes place in several factories, primarily in Asaka. Some 280,000 vehicles are produced each year, a share of which are exported to countries such as Russia, Azerbaijan, and Georgia. To weather the growing competition from Chinese manufacturers, Uzbekistan launched a joint venture with the Chinese company BYD in 2023. The local government has also announced plans to promote electric vehicle production in the Ferghana region, where a factory is set to be built with Chinese support at a cost of around 1.5 billion US dollars.
The geopolitical significance is growing
“The expansion of the Central Transport Corridor and the planned main railway line between Uzbekistan, Kyrgyzstan, and the Chinese Xinjiang will facilitate the import of Chinese vehicles and promote export products ‘Made in Central Asia’ to China and Europe,” says Vladimir Nikitenko, Regional Director for Central Asia on the Committee on Eastern Affairs of the German Economy.
The region is not only a transit corridor for goods, but is also increasingly becoming a sales market for vehicles. China in particular is investing heavily there, especially in the automotive sector – and with a long-term interest. “The sanctions against Russia and the global changes in supply chains have accelerated the trend towards Chinese suppliers. Many Central Asian retailers and consumers no longer look at Chinese manufacturers as an alternative option, but as long-term strategic partners. Additionally, re-export routes via Kazakhstan and Uzbekistan have established the region as a hub for parallel imports,” says Nodir Ayupov, Schneider Group’s Central Asia expert. In terms of foreign and economic policy, the countries of Central Asia are trying to maintain open relations with all parties. “They maintain diplomatic and economic relations with major players such as Russia, China, the US and the EU, while trying to balance the significant influence of their neighbouring states,” says Nikitenko.
“The expansion of the Central Transport Corridor and the planned main railway line between Uzbekistan, Kyrgyzstan, and the Chinese Xinjiang will facilitate the import of Chinese vehicles and promote export products ‘Made in Central Asia’ to China and Europe.”
A growth market with a running start: car sales and e-mobility
Kazakhstan and Uzbekistan dominate the Central Asian passenger car market, accounting for over 90 per cent of all new registrations. Around 200,000 new vehicles were registered in Kazakhstan alone in 2023, which is a 60 per cent increase compared to 2022. Around 70 per cent of these vehicles were produced locally. “Chinese and Russian car manufacturers have significantly expanded their market presence in recent years. Especially since Western brands scaled back their activities in the region. Chinese brands are rapidly gaining ground in Uzbekistan and Kazakhstan, mainly due to their favourable price-to-performance ratio and their adaptability. Russian brands, primarily Lada and GAZ, continue to enjoy a high level of brand awareness, particularly in rural areas,” says Ayupov.
E-cars have been gaining in popularity since 2023. Relatively inexpensive models from China have been particularly successful, making electric cars attractive to a wider range of buyers. The Zeekr e-brand from the Geely manufacturer has been particularly successful. According to the Kazakh statistics office, there were almost 8,000 electric cars in the country at the beginning of 2024, almost ten times more than in the previous year. As part of an initiative, the Uzbek government is promoting electromobility and aims to produce up to half a million electric and hybrid vehicles between 2024 and 2030. As part of this initiative, a joint venture between UzAuto and BYD is investing 160 million US dollars into assembling new factories. The Uzbek government is supporting the e-mobility initiative with a programme to expand charging stations, which was announced in spring 2024.
“Chinese brands such as Chery, Havel or Geely are rapidly gaining ground in Uzbekistan and Kazakhstan, mainly due to their favourable price-to-performance ratio and their adaptability. Russian brands, primarily Lada and GAZ, continue to enjoy a high level of brand awareness, particularly in rural areas.“
Brand landscape: between Soviet heritage and Chinese influence
The automotive market in Central Asia, particularly in Kazakhstan and Uzbekistan, has traditionally been dominated by brands such as Chevrolet, Toyota, Lada, and Hyundai. These manufacturers enjoy strong brand loyalty thanks to the durability of their vehicles, easy access to spare parts, and their long-standing presence in the region. However, Chinese manufacturers have been catching up rapidly in recent years and are gaining a stronger foothold in the market. “An investment of 1.5 billion US dollars in a new car factory in Ferghana, Uzbekistan, should significantly boost the Chinese market share in both countries,” says Nikitenko. Brands such as Haval, Chery, and Geely have firmly established themselves in Kazakhstan in particular. According to the Kazakh Automobile Association AKAB, models from Chinese brands will be among the five best-selling vehicles in Kazakhstan in 2023. Not only do these brands boast an attractive price-performance ratio, they come with full modern digital amenities such as large touchscreens, voice control, and integrated entertainment systems – a clear USP in this price class.
Regional manufacturing is on the rise
Regional car production is still fairly modest, but is making strides. Hyundai, Chevrolet, and the Russian manufacturer KAMAZ all have assembly factories in Kazakhstan, some of which are increasing their local added value. Production volumes are even greater in Uzbekistan, where UzAuto Motors operates as a quasi-monopolist. Although UzAuto Motors and the Allur Group compete in their domestic markets, they are still developing their export potential. “In Kazakhstan, the Allur Group benefits from protectionist measures and partnerships with international brands,” says Ayupov. “The localisation of components, the modernisation of production facilities, and access to international markets will determine the countries’ future competitiveness,” he explains. There are smaller assembly capacities in Kyrgyzstan and Tajikistan, often involving Chinese companies. The trend is towards greater regionalisation: vehicles are not only sold locally, but increasingly built there too. These developments clearly show that Central Asia is a significant growth market for the automotive industry, gaining in importance for international manufacturers and investors.
