The Business Year

Andrey Lavrentyev

President, Allur Auto

The auto market only really developed after Kazakhstan entered the Customs Union, because Kazakhstan—with a population of just 17 million—is a small market. The Russian market, by contrast, is large. The Customs Union was what gave us the ambition and commitment to become involved in car assembly and production. We had a distribution and import company here for some time, but our market share didn’t really grow, remaining at around 10%. Meanwhile, the other 90% was dominated by unregistered used car dealers that didn’t pay VAT. There are 3 million cars in Kazakhstan, and 80% of them, about 2.5 million, are at least 20 years old. That’s because Kazakhstan didn’t have a customs duty on second-hand cars, so naturally that’s what everyone imported and sold. The Customs Union increased customs duties to 30%, and car manufacturers were suddenly given incentives to develop.

Tamara Gvozdeva

General Director, ALMATY ATO

Renault has been represented in Kazakhstan for the past decade, compared to the 20 years that it has been present in Russia. Kazakhstanis generally opt for brands like Toyota and Mercedes, while French brands like Peugeot, Renault, and Citroí«n are barely represented. Our market differs entirely from Russia. In general, our well-to-do customers prefer Toyota, and the middle-class customers buy Daewoo. Over 2013, we sold 4,920 Renaults and 12,132 Toyotas in Kazakhstan. We succeeded in increasing the sales of Renault cars through the large volume of effective marketing staged by the head office. We no longer use the word “affordable,” but “available” when describing Renault cars.

Kanat Akishev

Director, Kanat Akishev

We would like to expand, especially as we will be offering many new models. We will be expanding our network of dealerships from 11 to 13. Volkswagen, for one, has released a new range of vehicles, particularly in Russia and Kazakhstan. Nowadays, we are heavily involved in talks on the possibility of manufacturing Volkswagen cars in Kazakhstan. I am optimistic about the future as we have projects and new models in the pipeline. Nonetheless, we are wary of the potential for a slowdown in the market, in parallel with Russia, which could materialize in 2014. Naturally, such matters correspond significantly with the global financial market and external issues.

Michael John Pease

General Director, Caspian Motors Almaty

It is typical of new and emerging markets. There are differences between mainstream Europe, for example, and the emerging markets of Asia. As these purchases form a significant percentage of clients’ incomes, and especially where they are their first vehicle purchase, people want to be sure they have bought the right product. It remains a social rite to be seen to have a new vehicle. We see more sedan sales than hatchbacks, because the sedan is more traditional and more easily recognizable. Customers essentially want strong brands with solid reputations, because their friends and relatives will question why they spent so much on something they were not sure about. There are some variations of course, but, in the end, people still want the same basic things in a vehicle: durability, quality, and value for money.

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