Syrym Semeybayev: Sales growth of passenger and commercial vehicles expected in Kazakhstan in 2019

Almaty. February 15. KazTAG -Sales growth of passenger and commercial cars is expected in Kazakhstan, while the auto recycling program will help to reverse the trend of aging vehicles in Kazakhstan. In addition, Kazakhstan is expected to continue production of electric buses and electric vehicles. Director of Saryarka AvtoProm LLP, Syrym Semeybayev, based in Kostanay, commented on the market trends.

- Cars sales growth was observed in Kazakhstan in 2018, do you expect increase in demand for passenger cars in Kazakhstan in 2019?

- We expect sales growth in the range of 70 thousand new passenger and commercial vehicles. The maximum sales of new cars were recorded in 2013, when official dealers sold 165 thousand new cars.

- In the first quarter, cars sales are usually low. Do you think the market can go to zero compared to the fourth quarter of 2018?

- As a rule, low sales in the first quarter are caused by the fact that dealers and manufacturers order vehicle kits to brand holders, and wait for their delivery. If cars are produced in Kazakhstan, after receiving the components, you need to assemble them and send them to the dealer for sale. It takes time. In general, in 2019 the sales market is expected to grow.

- The share of cars older than 20 years in resale in the secondary market, according to the statistics committee, increased from 36% in 2017 to 40% in 2018, while the share of vehicles aged one to three years decreased from 8.3% to 4.5%. What do you think about this trend in 2019?

- I think that the program of car recycling will help to lower this trend. It was launched in Kazakhstan in November 2016, within the frameworks of the first part of the program operated under which old cars were accepted as money, and since June 2017, certificates to cover part of the cost of new cars began to be issued as an alternative to people giving their cars for processing. In 2018, 13 000 certificates for purchase of new cars were issued in Kazakhstan, and totally 19 000 within the frameworks of the program. To date, when purchasing new vehicles, about 18 thousand certificates have been used.

The size of the discount certificate depends on the category of the vehicle being delivered for recycling and varies from 315 thousand to 650 thousand tenge. The certificate can be provided for purchase of cars, trucks, buses, while cash volume makes only up to 150 thousand tenge and only for a car.

The operator plans to negotiate with the Government the increase of the number of certificates issued annually.

- According to the results of 2018, in the territory of Kazakhstan 55 electric vehicles were registered against 35 sold one year before. How will the electric vehicle market develop in 2019? Will our taxi and bus fleets start using electric vehicles?

- It is still difficult to talk about the demand for electric cars in Kazakhstan - today you will not find an electric car in free sale in any salon. Only the SaryarkaAvtoProm plant tried to start production of electric vehicles, or at least import them to Kazakhstan. Now it is limited to individual import of electric vehicles - mainly Tesla, BMW i3.

The experience of China is very interesting in the development electric vehicle market , today it is the largest electric vehicle market in the world. They have the state program of transition to electric vehicles consisted of five stages: buses, utility trucks, delivery cars, taxis, and then - personal transport. China began to stimulate transition into electric vehicles 2010, they started subsidizing personal acquisitions in 2015. Therefore, we can talk about development of electric vehicle market through development of electric bus fleet.

In order to create demand for electric cars, it is necessary to make them comparable in value to gasoline analogues.

- Is it real?

- With incentive measures. Development of electric cars market in Kazakhstan is a comprehensive program. One of its components is stimulation of purchase. To make electric cars attractive for mass consumer, for example, in China, an electric vehicle buyer gets about 35% compensation of its retail price regardless whether the car is purchased for commercial  or personal use.

Production of cars on alternative fuels is a new direction for Kazakhstan. The Government, the Association of Kazakhstan Auto Business and the operator support the concept of development of electric cars market, therefore, together with introduction of infrastructure, mechanisms are being developed to encourage Kazakhstani people to buy electric cars.

- What are these mechanisms?

- First,  use of discounts on electric vehicles produced in Kazakhstan, increase in funding of certificates upon delivery of an old car for scrap, if the certificate holder plans to purchase an electric vehicle of domestic production. The next step is inclusion of electric vehicles in the program of preferential car loans.

Within the framework of the Eurasian Union, coordinated measures are being considered. For example, how to make electric cars attractive and convenient transport: to allow them to drive on the lanes for public transport, to provide free parking near the charging infrastructure, to give access to areas with limited traffic. By the way, the owners of electric vehicles are exempt from paying transport tax. Electric vehicles that do not have an engine volume are not in the Tax Code. These support measures do not require any funding but only a legislative initiative.

Secondly, the solution to the problem is where to charge the engine? The state, in collaboration with electricity grids and electricity suppliers, creates charging infrastructure.

As part of the development of the infrastructure of electric charging stations, 47 charging stations have already been installed in Astana, 22 in Almaty, and one in Borovoye. Measures are being taken to create a full-scale  infrastructure for fast charging of buses in Astana and Aktau.

- How much money did the people of Kazakhstan spend in 2018 for purchase of new passenger cars? What region was the leader?

- People spent 547 billion tenge for purchase of new cars in 2018. Car dealers are most often visited by customers in Almaty, Astana, Atyrau, Shymkent and Kostanay. They sold 73% of all sales of new cars to 400.3 billion tenge.

- Thank you for the interview.