Chinese automakers are set to begin production at a newly built plant in Kazakhstan by 2024. The factory will be located in the city of Kostanay and will be capable of producing up to 50,000 vehicles annually. This move is expected to enhance China’s auto exports and expand its international presence.
According to the China Association of Automobile Manufacturers, China’s auto exports rose by 34.2% year-on-year to 724,000 units in the first quarter of 2021, reflecting the strong demand for Chinese vehicles globally. With the new production facility in Kazakhstan, Chinese automakers can tap into the growing Central Asian market more efficiently.
The project is a result of a partnership between the Chinese automaker Changan and the Kazakh state-owned company AllurGroup. The plant will manufacture Changan-branded cars, including sedans, SUVs, and pickup trucks. The investment is estimated to be around $100 million, and the project is expected to create job opportunities for local Kazakh workers.
Kazakhstan, with its abundant natural resources, has been attracting foreign investors in recent years. According to the Kazakh Invest National Company, the country has received more than $30 billion in foreign direct investment over the past decade. The latest investment by the Chinese automakers is set to further strengthen Kazakhstan’s position as a regional economic hub.
The move towards expanding their production outside of China is a smart strategic move for the Chinese automakers. With the global demand for electric and hybrid vehicles increasing, having a manufacturing base in Kazakhstan will enable them to tap into the Central Asian market more efficiently. Additionally, the plant’s location will allow for easier access to European and Russian markets.
Overall, the partnership between Changan and AllurGroup is expected to be mutually beneficial for both companies, as well as the local economy in Kazakhstan. The production of 50,000 vehicles annually will add to the country’s growing automotive sector, which accounted for 3.7% of Kazakhstan’s GDP in 2020, according to Statista.
