We know why there are no Kazakh cars in dealing centers now, that we have the soft auto-lending program.

“Russian buyers were coming and visiting our dealing centers.  Those were people from official Russian dealing centers and informal auto-markets.  But we may not sell cars to them, because our car plants prohibit that.  There is one regulation – if a car costs more than USD 50 thousand, secondary sanctions may be dropped.  And there are other bad implications.  Russian businessmen began giving moneys to our residents.  Our people come to dealing centers and buy cars, as if for themselves, and then sell same to Russians, as used cars” – said owner of Astana Motors Nurlan Smagulov to the LS news agency.

First Come, First Serve

Smagulov reports that for a short period of time, i.e. some 5 months, there was a massive stream of Kazakh cars to Russia, but after the Russian Ruble devaluation, Russian users lost interest in the Kazakh cars.  The new trend unwinding in Russia now is the Chinese makes.

Today, we see a flow of cars from China to Russia.  Not from our country to Russia.  Today, there are enough vehicles in Kazakh centers,

says head of Astana Motors.

Mr. Smagulov also expressed his opinion about measures that we need to take to reduce prices for new cars – the higher is localization, the lower if the price. Low level localization explains why cars assembled in Kazakhstan are so expensive – our car manufacturers only add wheels, accumulator batteries and screen-wipers to cars.

Nurlan Smagulov so far is one and only person from indigenous motor-vehicle industry, who voiced the truth.  Before his explanation, we could only guess where those 100 thousand cars made in Kazakhstan got lost (data source – Association of Kazakhstan Car Makers).

In 2021, Kazakhstan produced 72 thousand cars and they were readily available in dealing centers.  Today, we make some 100 thousand, but we did not see them in those centers.  That means that we either never made the amount that was officially reported, or all of those cars were exported. 

There is no instance in Kazakhstan that could verify statistics given by the Association of Kazakhstan Car Makers.  All the data is under the auspices of the Internal Affairs Ministry, but, for the some reason, the Ministry have kept that data secret since 2017.  Since 2017, there is no open information regarding the newly registered cars,  

a famous public activist Sanzhar Bokayev reported to globalnews.kz back in January 2023.

He was right. 

Industry, Kazakh Style

“The cars were being brought outside KZ all the time through 2022 and in the beginning in 2023. Astana Motors and Allur Auto still have not published their reports, but I managed to identify that they collected records-breaking proceeds in those years. Smagulov would bring premium-class vehicles from Europe to Kazakhstan, and then those cars would find themselves in Russia, both through official dealing centers and individuals. The car flow was just gigantic” – said Sanzhar Bokayev, while sharing his comments on the latest statements made by owner of Astana Motors Nurlan Smagulov. 

“As for exports of Kazakh makes to Russia, nobody had ever reported that before Smagulov. Official instances would either deny lack of cars in dealing centers or give some odd explanations. In fact Smagulov confirmed a peculiar situation – Kazakh makes partly subsidized by our Government, i.e. our tax-payers, were exported to Russia. In other words, Kazakhstan paid billions of subsidies to Russian car users” – adds Mr. Bokayev

Each car, in its price, has engraved unpaid taxes and preferences, subsidies for encouragement of indigenous makes and recycling fee refund.  All of that was supposed to reduce the price of a vehicle.  The national treasury under-collected money.  Instead of saturating domestic market with new cars and thus reducing the shortage of vehicles, we simply sold cars out to Russia.

Besides, the state subsidized logistics, as well, because those car flows were officially exports.  Why did that become possible? Because our industrial police is raw – national treasury loses a big time, while our citizens receive nothing.

In the last several years, companies owned by Smagulov and Lavrentiyev, received KZT 1 trillion or USD 2,5 billion of state subsidies for development of indigenous car making industry.  They would have easily built 5 car making plants to assemble Hyundai or Toyota cars, each plant costing USD 500 million. The level of localization in those plants could be up to 50%.  Those plants did not necessarily have to be profitable, because the government would still help them out.

We built nothing, we saw no cars and no moneys.  That is the total failure of the domestic car making industry and policy implemented by the last two Prime-Ministers, who approved that policy.