Vehicle manufacturing is a potential locomotive of the economy of any country, since the production of cars inevitably entails the opening of enterprises in related industries both for the manufacture of components and for subsequent servicing of equipment that has come off the assembly line. And as a result of the creation of one job in vehicle manufacturing in related industries, five or six new jobs are automatically created. In this regard, vehicle manufacturing was identified as a priority area of industrial development programs in Kazakhstan, which began to be implemented in 2009.
Over the 10 years of implementation of two such programs (2010-2014 and 2015-2019), the number of vehicle-constructing enterprises in Kazakhstan increased 1.7 times - from 1700 in 2009 to 2910 in 2019. As a result, the volume of production increased almost 5 times (from 281.3 billion tenge in 2009 to 1 trillion 371.9 billion tenge in 2019), the volume of investments attracted per year increased 2.1 times (from 23.8 billion tenge in 2010 to 50.2 billion tenge in 2019), the volume of exports increased by 3.1 times (from $ 378 million in 2010 to $ 1.1 billion in 2019). The volume of production in vehicle manufacturing at the end of the year before last amounted to 1.5 trillion tenge, in the manufacturing industry it was the second result after metallurgy.
And if we take into account that vehicle constructing enterprises regularly place orders, including at metallurgical production, thereby increasing their volumes, then it can be argued: by 2019, vehicle manufacturing has become one of the main locomotives of the Kazakhstani economy. The last year proved that the stake of the Kazakh authorities on vehicle manufacturing is fully justified from the point of view of ensuring the stability of the republic's economy.
How Kazakhstani vehicle manufacturing survived the pandemic
2020 - the year of the COVID-19 pandemic - has put almost all sectors of the Kazakhstani economy in tough conditions due to quarantine restrictions and a decline in demand for products. As a result, according to the Ministry of National Economy of the country, Kazakhstan's GDP went into the negative zone (- 2.6%) at the end of 2020. But at the same time, vehicle manufacturing showed high growth rates - at the level of 16.3% in physical volume, which became one of the best industry indicators in the republic. At the same time, according to the Ministry of Industry and Infrastructure Development, in monetary terms, vehicle constructing enterprises produced products by 31.7% more than in 2019.
The difference between the growth in physical volume and the increase in cost indicates that Kazakhstani car manufacturers last year mastered the production of more complex and, as a result, more expensive products. It is no coincidence that in November last year, the export indicator of products in this industry came close to $ 1 billion. At the same time, the automotive industry became the clear leader in the industry - here the growth was 52.5%, and if for the whole last year, 92 thousand 989 new cars and commercial vehicles for a total amount of 972 billion tenge were sold by official dealers, the lion's share of them (77.5 thousand) was produced in Kazakhstan. The aggregate result of the work of the automotive industry in monetary terms in 2020 exceeded the same result in 2019 by more than 70.4% (612.8 billion tenge).
At the same time, growth in the automotive industry during the pandemic was recorded in all segments: the production of passenger cars increased by 47%, up to 64 thousand 790 units, the volume of production of trucks doubled - 8 240 units, buses - by 66% (1 thousand 801 units). Production was also doubled by manufacturers of trailers and semi-trailers (2 thousand 196 units), at the same time 2020 was marked by the launch of new car factories and production in the country: last year, production of Chevrolet cars began at the Kostanay SaryarkaAvtoProm plant, Hyundai passenger cars in Almaty and Yutong buses in Karaganda region. Of course, no one would launch new production without guarantees of stable sales, and here an important role was played by the state support of the industry, which the authorities have been providing to domestic producers over the past several years through Development Bank of Kazakhstan JSC (hereinafter DBK, a subsidiary of the Baiterek Holding).
When a car is not a luxury, but an affordable product
This is a program of preferential car loans in Kazakhstan, which DBK launched in April 2015 as part of the Nurly Zhol presidential initiative. We remind you that the conditions for the provision of preferential car loans to end borrowers remain unchanged for six years of this program: the nominal interest rate on a loan for a car of domestic production is no more than 4% per annum, the annual effective interest rate in banks cannot exceed 7.5% while the rates for ordinary car loans in commercial banks now start at 16%. The loan term under this program does not exceed 7 years, the cost of a car purchased using such a loan should not exceed 15 million tenge. At the same time, along with the development of the linear range of the domestic auto industry, the number of car models that can be purchased under the program is also increasing.
Buyers can choose between more than 40 car models of such brands as JAC, Chevrolet, Ravon, UAZ, Hyundai, Kia, Skoda and LADA produced by SaryarkaAvtoProm LLP, Hyundai Trans Kazakhstan LLP and Asia Auto JSC. Seven commercial banks of the country are involved in the implementation of the program - Eurasian Bank JSC, Subsidiary VTB Bank Kazakhstan JSC, BankCenterCredit JSC, SB Sberbank JSC, Halyk Bank of Kazakhstan JSC, ATFBank JSC and ForteBank JSC through which, as of January 28 of this year, 26 thousand 958 loans were issued for the purchase of vehicles of domestic automakers for a total of 135.8 billion tenge. This is despite the fact that over the entire existence of the preferential car lending program, Development Bank has allocated 6 tranches for its implementation for a total of 82 billion tenge: 2 tranches from the National Fund in the total amount of 26 billion tenge in 2015-2016, 2 tranches from the Republican budget in total amount of 16 billion tenge in 2018-2019, as well as 2 borrowings of DBK by issuing bonds for a total amount of 40 billion tenge from "Kazakhstan Sustainability Fund" JSC.
Why the "revolver" was the best stimulus for production
The fact that the amount of loans issued under this program is more than one and a half times greater than the volume of tranches is explained by its revolving nature: payments from the repayment of existing loans are directed to the issuance of new loans. And this means that the program will cover an increasing number of Kazakhstani car enthusiasts - and stimulate the domestic auto industry to expand the production line, since the preferential program gives it a guarantee of product sales. The five leaders in terms of the number of cars assembled in Kazakhstan, according to the Association of Kazakhstan Auto Business, included models of those brands that are included in the list of preferential lending: Hyundai (22,136 units, + 39% to the level of 2019), Chevrolet / Ravon (19 thousand 434 vehicles, + 217%), LADA (15 thousand 548 vehicles, + 8%), KIA (4 thousand 863 cars, + 32%) and JAC (4 thousand 173 cars, + 50%).
According to DBK representatives, the most popular cars under the state program for Kazakhstanis are Kia Sportage (1 thousand 791 cars), Lada Vesta (1 thousand 725), Hyundai Tucson (3 thousand 025) and Hyundai Elantra (2 thousand 593). At the same time, residents of the cities of Nur-Sultan and Almaty topped the list of active participants in the state program, the largest number of issued car loans was recorded there, 5,036 and 5,278 loans, respectively. The program of preferential car loans has fulfilled its main mission to popularize cars of domestic assembly: according to experts, in the first two years of the program, a third of cars produced in Kazakhstan were sold with its help.
Nevertheless, the share of Kazakhstani cars sold within the framework of car lending accounts for only 12.7% of the total production volume, that is, domestic cars are purchased not only because preferential terms are offered for their purchase. Over the years of the program, Kazakhstanis have become convinced of the quality and reliability of the products of the domestic auto industry, so their sales will only grow: according to the forecasts of the Association of the Kazakh Auto Business, in 2021 the trend of increasing the share of local cars in the market will continue: AKAB predicts the level of sales in the current year within 100-120 thousand units of new passenger cars and commercial vehicles against 92 thousand 989 new cars in 2020.
