NEWS AND EVENTS
May 21, 2014
Automotive industry: Nation on Wheels
Investment Map has widely covered Uzbekistan’s trade and investment cooperation with other countries. However, we have been able to narrate just about a small segment of it, for there are dozens of nations, hundreds of companies and billions of US dollars’ worth investments involved in this economic process. This is why we have decided to adjust the format to make our coverage more effective. From now on, the column will deal with cooperation aspects with foreign companies by each sector of Uzbekistan’s economy, and the automotive industry is first on the list.
The long-standing industrial sector of Uzbekistan’s economy features several industries that have been supplying high quality goods to the local and foreign markets for dozens of years. Besides, there are new industries in the sector – those grown since the Independence Day.
Among them stands out the national automotive industry. Within a short period, it has become a substantial player in the local and CIS markets. The President of Uzbekistan has repeatedly stressed its importance to the country’s economy. “Our independent state is making rapid progress towards a better future, and the birth of our own automotive industry – a newcomer to our economy – is one of our first victories on the way,” Islam Karimov points out.
Back then, in the early 1990s, Uzbekistan had to rebuild and reorient its economy, which had been left without most of its suppliers of raw materials and manufacture components, as well as its consumers. The old cooperation ties had been broken then, and the economy had to adapt to different logistic structure, and taxation and customs regulations. Despite the difficulties, Uzbekistan managed to revive and began to enjoy a gradual economic growth shortly afterwards, and it was when the idea of building a full-scale automotive industry in the country was developed and put into implementation. It must be noted that no Central Asian state then, and Uzbekistan either, had any experience in construction of such a technology-intensive industry, so the republic needed a strategic partner that would help it by sharing its automotive knowledge and technologies.
The foundations for the industry were laid in June 1992 during the visit of the President of Uzbekistan to South Korea where he met with officials of the automotive company Daewoo Motors. The following March, the joint venture UzDaewooAuto was established in Uzbekistan, and the construction of the car-making factory started in June 1994 in the town of Asaka in Andijon region. The first cars made in the factory rolled off the production line in March 1996.
The microvan Damas was the first model Uzbek automotive industry produced. It was popularly nicknamed Brick Loaf for its peculiar appearance. In the current year, new production facilities for this vehicle have been built in Khorazm region of the country. The latest generation of the microvan is still one of the most popular motor vehicles made in Uzbekistan. In June 1996, they also launched another two models – the Tico and the Nexia.
Asaka factory gradually increased its output. In May 2001, it produced its 250,000th vehicle. However, the local and Korean specialists realized that new models had to be put into production and new technologies had to be introduced so as to stay competitive in the auto markets, and shortly before September 2001, they launched another two models – the Matiz and the Nexia with DOHC engine. These two cars improved the automaker’s standing considerably. They became the major export models and won large segments in the auto markets of the neighboring countries and Russia, successfully competing with the leading German, French and Japanese makes. In 2003, the Matiz was awarded the title Car of the Year in Russia, and the next year Uzbek automaker received the International Quality Summit award in New York. In 2003, they started large-component assembly of the Lacetti. In 2004, the Matiz Best with 1-liter engine and automatic transmission was launched. In October 2005, the factory manufactured its 500,000th vehicle. In 2006, it began the production of the Damas B150.
In 2007, the automaker reached a significant milestone – it went into partnership with the world-famous corporation General Motors by signing a strategic cooperation agreement with it. That year was also unique in terms of new vehicles launched: the Tacuma, the Epica and the Captiva. Besides, they began to manufacture the two most popular cars Nexia and Matiz with EURO 3 engines in 2007. In 2008, Uzavtosanoat JSC of Uzbekistan and General Motors established a joint venture, and the factory – under the new name – manufactured its 1,000,000th vehicle.
Since 2010, the joint venture has been using global GM makes. In August 2010, they launched the more technologically advanced Spark, a kind of successor to the Matiz. In 2011, the restyled version of the Captiva went into production. In March 2012, large-component assembly of the front-wheel-drive business-class sedan Malibu with a 2.4- liter four-cylinder engine started, and late in August 2010 they launched the Cobalt. The product range of the automaker also widened last year and the beginning of the current year: they released the upgraded Lacetti in 2013 and the minivan Orlando early in 2014. GM Uzbekistan manufactures 9 models today: the Matiz, Spark, Nexia, Lacetti, Cobalt, Damas, Captiva, Malibu and Orlando.
Dozens of businesses in Uzbekistan manufacture various components for these cars. Constituents of Uzavtosanoat JSC, these companies replaced 317 units of old-fashioned equipment with modern ones at a cost of over $19.3 million last year. The component parts they manufactured under the program of production localization in 2013 amounted to 6.86 trillion soums. Altogether, Uzavtosanoat JSC manufactured 251,342 vehicles in 2013, which exceeded the previous year’s number by 4.8%. The 2013 output of trucks, cars and buses had grown by 36.9%, 4.5% and 3.3% respectively as against 2012.
While dealing with the subject of Uzbekistan’s automotive industry, we must mention its unique auto engine factory GM Powertrain Uzbekistan – the only auto engine maker in Central Asia. Launched in November 2011, the factory is capable of producing up to 200,000 engines per year. Some of the engines made by GM Powertrain Uzbekistan are now shipped to GM car-making factories overseas.
The factory has modern high-tech equipment for melting and casting, aluminum heat treatment, cylinder block processing, automatic line assembly, gauging, etc. The production is fully computerized, which allows for continuous quality control, and it meets all the international environmental standards.
(Source: “Uzbekistan Today” newspaper)