With 15,5 mio. inhabitants, Kazakhstan is the fourth largest country in CIS, after Russia, Ukraine and Uzbekistan. Given the difficult political situation in Uzbekistan, Kazakhstan is actually the third most interesting country in CIS. Kazakhstan’s real GDP was growing with double-digits over the last years. Wages were also growing at a comparable pace and are now at 424 USD per month on average. With rising inflation, real growth will be more moderate in the future.
Kazakhstan’s car penetration is comparable with Russia and still much lower than in Western European markets. The growth in car parc was mainly driven by imports of used cars, which peaked in 2006. The new car market is also growing continuously but growth rates of 40% p.a. over the last years can not be maintained in the future. We estimate a growth of about 19% p.a. until 2010.
The new car market is characterized through the large number of grey dealers. Whereas in 2006 more than 50% of new car sales of non-CIS brands were made through grey dealers, this share in reducing now. Russian brands still play a strong role in the market and grow with overall market development. The parc is still dominated by VAZ.
Financing of cars is developing rapidly while market penetration is still low. Financing is especially important for Kazakhstan since consumers prefer large cars and SUVs which are more costly. The availability of personal information for loan procedures is improving, but only slowly. With rising inflation, however, the growth of car financing might be limited.
Kazakhstan currently is not a market for small cars. Most cars sold are from lower and upper medium class or SUV-class. The availability of smaller cars is also limited, for example Toyota is not selling its Yaris through its official dealerships. It is unclear, how consumers will react to a better offering of smaller, affordable cars. With energy prices up and inflation on the rise, smaller, less fuel consuming cars could be an opportunity in the market.
Kazakhstan has no own passenger car brand. Azia Avto, a company listed on the Kazakhstan Stock Exchange (KASE), currently is the only producer, assembling Ladas, Skodas and Chevrolets. Nissan is about to set up an assembling facility and several Korean and Chinese OEMs are investigating a potential entry. With plans of AvtoVAZ, the Russian car maker, to buy a stake of at least 25% in Azia Avto, the situation is getting more complicated. Since Renault took a stake of 25% plus one share in AvtoVAZ, and Renault and Nissan being part of the same group, the car manufacturing scene in Kazakhstan might look different.
Given this situation, there is a limited number of players in the automotive industry in Kazakhstan. Most of them export, mainly to Russia. The government wants to develop the automotive industry and is slowly progressing. Nissan’s plant and Nokian Tyres’ production joint venture are first steps. Kazakhstan’s advantages are, besides incentives provided by the government, its strategic location to Russia, the upcoming Eurasian Economic Community (EurAsEC) which will develop a customs union between Russia, Kazakhstan and Belarus at first and the low wages. In total, we expect a strong increase in local production activities although still on a low level compared to major automotive nations.
Along with the inflow of used cars, the aftermarket is growing by almost 10% p.a. over the next years to 2010. The aftermarket is one of the most attractive sectors of the Kazakhstani automotive industry over the next years. With further additions to the parc and more demanding consumers, better and more frequent service and better parts are needed.
The distribution system for spare parts is only forming. Also, service chains have not yet developed and even Bosch car service, present in many emerging automotive markets, is just starting.
In any case, distribution is a real challenge due to the size of the country. With a population density of 6, it is hard to reach nationwide penetration. A good starting point are the two major cities, Almaty and Astana, followed by the mining provinces, which have a larger car parc and a wealthier population.
In total, the Kazakhstani market for passenger cars and the aftermarket provide attractive opportunities. Especially in the aftermarket, structures are just forming and there is great value to be generated by entering early.
To prepare this market report, we used primary and secondary research methods: expert interviews and consumer surveys – in particular for the market of automotive parts, which is not covered yet by any substantial statistical data – and standard analysis of secondary information available on the topic. Based on our experience and developed competencies we have built proprietary market models to forecast future market development. The report was compiled in the period from October 2007 to June 2008 and hence includes statistical data until Q1, 2008, if available.
For a table of content and a list of figures and tables, please see details below.
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Table of Content Automotive Market Report Kazakhstan
- 2 LIST OF FIGURES 4
- 3 LIST OF TABLES 6
- 4 SUMMARY 7
- 1 COUNTRY BASICS 10
- 4.1 Economic Development 13
- 4.2 Regional Economic Development 15
- 4.3 Kazakhstan and CIS / EurAsEC 18
- 5 KAZAKHSTANI PASSENGER CAR MARKET 19
- 5.1 Kazakhstani Car Parc 19
- 5.1.1 Structure of Car Parc by Age 21
- 5.1.2 Structure of Car Parc by Brands and Models 22
- 5.1.3 Car Parc in Regional Markets 24
- 5.2 Passenger Car Sales and Imports 26
- 5.2.1 Size of Market 26
- 5.2.2 Market Characteristics New Cars Market 29
- 5.2.3 Sales Drivers for New Cars 35
- 126.96.36.199 Economic Growth and Income Levels 36
- 188.8.131.52 Used Car Imports 36
- 184.108.40.206 Regulatory environment 37
- 220.127.116.11 Car Financing 38
- 18.104.22.168 Dealership Networks / Distribution Systems 40
- 22.214.171.124 Consumer preferences 41
- 6 KAZAKHSTANI COMPONENTS AND SPARE PARTS MARKET 43
- 6.1 Car Production and Suppliers 43
- 6.1.1 Production 43
- 6.1.2 Primary Market and Suppliers 45
- 6.2 Kazakhstani Aftermarket 47
- 6.2.1 Market Segments Aftermarket (OE, IAM, Fakes) 47
- 6.2.2 Market Size Aftermarket 49
- 6.2.3 Distribution System for Spare Parts 51
- 126.96.36.199 Parts Importers and Distributors 53
- 188.8.131.52 Spare Part Shops 55
- 184.108.40.206 Service Stations 56
- 220.127.116.11 Other Supply Channels 57
- 7 OPPORTUNITIES AND RISKS 59
- 8 APPENDICES 61
- 8.1 Industrial Production in Regions 61
- 8.2 Major Kazakhstani Cities 62
- 8.3 Regulations and Fees for Car Imports from Non-CIS 64
- 9 ABBREVIATIONS 65
List of Figures
- Figure 1: Map of Kazakhstan with Administrative Regions 11
- Figure 2: Development of Nominal GDP, bn. USD, 2002-2010 13
- Figure 3: Development of Monthly Nominal Wages, in USD, 2002-2010 14
- Figure 4: Development of Consumer Prices, 2002-2007 15
- Figure 5: Share of Mining Oblasts in Kazakhstan’s Industrial Output, 2006 16
- Figure 6: Development of Passenger Car Parc, in 1.000, 2002-2010* 20
- Figure 7: Passenger Car Penetration in Kazakhstan and Selected Countries, 2006/2007 20
- Figure 8: Structure of Kazakhstan’s Car Parc by Age, 2007 21
- Figure 9: Top-Ten Brands in Kazakhstan’s Car Parc, 2007 23
- Figure 10: Regional Distribution of Cars by Density, 2007 24
- Figure 11: Sale of New Cars in Kazakhstan, in 1.000, 2002-2010 27
- Figure 12: Relative Sales and Import Structure of Car Market, 2002-2010 28
- Figure 13: New Car Sales by Type of Official and Grey Dealers, 2005-2007 30
- Figure 14: Market Share of Top-Brands (Official and Grey Dealers), 2007 32
- Figure 15: New Car Sales by Segment, 2007 35
- Figure 16: Import of Used Cars into Kazakhstan, in 1.000, 2002-2010 37
- Figure 17: Share of Financing Arrangements for New Car Sales, 2005-2007 39
- Figure 18: Key Criteria Influencing Car Choice in Kazakhstan, 2006/2007 42
- Figure 19: Production of Passenger Cars in Kazakhstan, in 1.000, 2002-2010 45
- Figure 20: Development of Automotive Components Market, in mio. USD, 2002-2010 46
- Figure 21: Share of OE-, IAM-, Fake-, Used-Parts for Routine Service, 2007 48
- Figure 22: Size of Kazakhstani Aftermarket, in bn. USD, 2007-2010 50
- Figure 23: Aftermarket for Important Spare Parts, in mio. USD, 2007-2010 51
- Figure 24: Main Distribution Channels for Spare Part Distribution to Car Holders, 2007 52
- Figure 25: Shares of Spare Parts Sales Channels for Non-OE in Kazakhstan, 2007 53
- Figure 26: Share of Service-Channels Used for Car Repair and Maintenance, 2007 57
List of Tables
- Table 2: Population Development in the Kazakhstani Regions (Oblasts), 2001-2007 12
- Table 3: Income per Capita in Regions, 2007 17
- Table 4: Most Popular Models in Kazakhstan’s Car Park, 2006-2007 23
- Table 5: Regional Car Park and Car Penetration of Kazakhstan, 2007 26
- Table 6: Sales and Import Structure of Kazakhstan’s Car Market, 2002-2010 29
- Table 7: Top Selling Brands (New Cars) of Dealers Organized in SADK, 2006-2007, Q1 2008 32
- Table 8: Top Selling Models, 2007 34
- Table 9: Authorized New Car Dealerships in Kazakhstan, 2007 41
- Table 10: Production Volume of Azia Avto by Brand, 2003-2007 43
- Table 11: Major Kazakhstani Component Suppliers 47
- Table 12: Larger Independent Importers and Distributors of Broad Range of Spare Parts 54
- Table 13: Larger Independent Speciality Importers and Distributors 55
- Table 14: Industrial Production in Regions, in mio. Tenge, 2005-2007 61
- Table 15: Main Kazakhstani Cities 63