The project was approved during the ninth Russia-Kazakhstan Interregional Cooperation Forum last year and was launched on the day of the forum this year. Russian car manufacturer AutoVAZ is a technical partner in the project.
“This plant is the first Kazakh-Russian joint venture to produce cars completely on the territory of Kazakhstan, and it is an example of successful interstate cooperation,” Russian First Deputy Minister of Industry and Trade Gleb Nikitin said at the event.
According to Kazakh First Vice Minister of Industry and New Technologies Albert Rau, construction will take three years and the factory will begin operating in 2016. “This venture is the result of years of negotiations and detailed analytical work carried out by the two governments and the BIPEK Auto and AutoVAZ companies. Back in 2000, Lada was the first car to come off an assembly line at a Kazakhstan plant. Today, thanks to our Russian partners, we can build a powerful production system that is integrated into the global auto industry,” Rau said.
Nikitin and Rau both laid the first stones into the foundation of the new plant.
The new plant will be the first full-cycle car factory in the country. Goods from the three Customs Union countries – Russia, Belarus and Kazakhstan – will make up 90 percent of the final production, while local content will exceed 50 percent. The factory will generate an additional 150 billion tenge (US$980.85 million) in annual GDP, while the volume of export is expected to reach 80 billion tenge (US$523.12 million).
The new project is also expected to engender local production of a wide range of accessories, including bumpers, seats, fuel tanks and exhaust systems, within the territory of the factory, beginning in 2016-2017. By 2018, the factory will produce battens, suspensions and steering components as well as motion transmission mechanisms.
A memorandum concerning the production of parts was signed with Russian manufacturers SED-Sizran and Faurecia Metal Products Exhaust Systems on the day construction was launched. Total investment in related industries will exceed 96.33 billion tenge (US$630 million). The Ust-Kamenogorsk factory, located on the border with Russian Siberia, is going to be an important centre of production, according to Oleg Lobanov, acting president of AutoVAZ.
The first models the factory will produce will be AutoVAZ’s newest products, Lada Granta and Lada Kalina. Several Renault models are scheduled to be produced later.
“Today, Asia Auto makes 51 percent of all engineering products in East Kazakhstan. We expect a major breakthrough in this industry,” said Chairman of the Board of Directors of BIPEK Auto Anatoly Balushkin.
Akim (Governor) of East Kazakhstan region Berdybek Saparbayev stressed that the region now has serious potential in the engineering industry thanks to Asia Auto’s existing plant and the new joint venture, along with a Kazakh-Belarusian assembly facility in Semey that produces field engines and buses.