Commercial Automotive

 

Currently, the Republic of Uzbekistan is the largest car manufacturer in Central Asia and takes second place among the CIS countries with a high share of localization (about 45-55%) in passenger cars and about 15-30% of trucks and buses.

Through the state-owned company Uzavtosanoat, several global brands have been localized in various segments, including passenger cars and LCV (General Motors), trucks (MAN, ISUZU), and buses (ISUZU). However, in almost all joint ventures, the state controls the controlling stake through Uzavtosanoat – 75% in GM Uzbekistan – 51% in a joint venture with MAN, 84% in a joint venture ISUZU and 50% in a joint venture with PSA.

The volume of production of passenger cars amounted to 140.2 thousand units. (159.1% by 2016), buses and trucks ISUZU – 3600 pcs. (105.3%), MAN trucks and buses – 1200 pcs. (119.4%), batteries – 680.2 thousand units (116.3%), power units – 91.6 thousand pcs. (2.1 times).

The company's enterprises produced 6,686.2 billion UZS, with a growth rate by 2016 – 156.4%. Today, the demand for cars in the domestic market is covered by 60-70%. Also trucks by 50%. Currently, the country's government is actively engaged in attracting foreign direct investment in the automotive industry as an independent player for the development of competition and production of the industry.

Currently, the industry has 23 joint ventures that produce cars, buses, trucks, components, and nodes for cars and consumer goods.

The following companies work in the field of automobile production:

• Joint-stock company, GM Uzbekistan, created jointly with General Motors to produce cars,
• Samarkand Automobile Plant for production of buses and middle-class trucks, which are founded along with UzAuto by Japanese companies Isuzu and Itochu,
• the joint Uzbekistan – Germany enterprise MAN Auto Uzbekistan to produce heavy trucks and buses.
• UzAuto and Peugeot Citroen Automobiles signed an agreement on establishing a joint venture. A new plant to produce light commercial vehicles is being built in the city. The project provides the production of different configurations of cars Peugeot Boxer and Peugeot Expert on a full cycle.

The enterprise UzAuto TRAILER was established to produce mounted and trailed equipment and Kamaz trucks assembled with a Russian company.

For the production of auto components, about 40 large enterprises of UzAuto work in this area, most of which are joint ventures with leading global manufacturers of auto components such as Korea Delfi, Erae, Sungwoo Hitech, Austem, AMS, KM&I, etc.

In addition, the delivery of auto components is provided by more than 160 small and medium independent suppliers.

Jointly with General Motors and UzAuto, GM Power Train Uzbekistan was established to produce engines of 1.2 and 1.5 liters. The plant is the only enterprise in the global network of General Motors. The casting of aluminum products, the machining of parts, and the full cycle of assembly and testing are carried out in one plant.

UzAuto, along with its production activities, attaches great importance to qualifications and personnel education, is the founder of educational institutions, such as the Turin Polytechnic University in Tashkent, the Academic Lyceum of the University, as well as mechanical engineering colleges in Andijan and Samarkand.

A striking example of the high potential of localization enterprises of UzAuto is the supply of automotive components to the conveyor of foreign auto manufacturers. UzAuto enterprises supply a solid list of automotive components to manufacturers’ conveyors in 5 continents of the world. The staff of enterprises has sufficient qualifications for ensuring the process of development, production, and delivery of products. Introduction of world standards in production and quality management, the availability of several international certificates, and equipping enterprises with necessary laboratory testing equipment allows producing products that meet international standards. Such systems as GMS, 5S, Kaizen, and others have been introduced at UzAuto enterprises.

Investment opportunities in Uzbek Automotive industry

 Stamped parts; Plastic parts; Cast iron parts; Mechanical processing of brake discs and drums;  Audio system; Plastic tanks for cars; Wheel; Suspension springs for cars; Shock absorbers for cars; Spark plug; Extrusion for rubber seals; Switches for cars; Rearview mirror;  Roller forming; Plastic pedals; Electric motors for cars; Shift knobs; Wipers and wiper mechanism;  Seat belts for cars; The axis of the car; Steering column; Steering gear; Brake system parts;  Brake pads; Connectors and covers for 522 connectors; Hoses, tubes.

What attracts investors to the Uzbek auto industry

• a package of tax benefits and state support measures on individual resolutions of the President of the Republic of Uzbekistan and the Cabinet of Ministers; (RP-800 of February 21, 2008; RP-1020 of December 16, 2008, RP-1736 of April 4, 2012, and others).
• Resolution of the President of Uzbekistan of 01.07.2018, No. RP-3028 “On measures of further improving the management and accelerated development of the automotive industry for 2017-2021”.
• agreement on a free trade zone between the CIS countries;
• availability of raw materials (copper, lead, metal, zinc, polypropylene, polyethylene, rubber, and others);
• multi-level quality control system
• affordable and skilled labor (Turin Polytechnic University, Turin Academic Lyceum in Tashkent Polytechnic College in Samarkand city and Andijan region);
• low cost of energy;
• modern production facilities with necessary infrastructure;

optimal logistics costs.

 

Uzbekistan Agriculture Automotive

The most potential branch of mechanical engineering, which has all the necessary components for its development, is agricultural engineering.

The general state of the industry

The production of agricultural machinery for the Republic of Uzbekistan is one of the key strategic sectors. In addition to production volumes – about 8 thousand units in 2017, of which about 1.2 thousand tractors and 0.3 thousand combined, important success has been achieved in this industry in the last few years.

As of July 1, 2018, the park of agricultural machinery in the Republic of Uzbekistan amounted to 150,486 units, including 57,822 units of tractors, 58 019 units of mounted equipment, 3,608 units of combine harvesters, 1,224 units of cotton harvesting machines, 1,738 units of forage harvesting equipment, 28,075 units of other agricultural machinery.

Of the above quantities of available agricultural equipment, 82 921 units are obsolete with a lifetime of 11 years or more, including 30,412 units of tractors, 28,071 units of mounted equipment, 1,131 units of combine harvesters, 175 units of cotton harvesting machines, 919 units of forage harvesting equipment, 19 894 units of tillage equipment, 1 445 units of equipment for various types of fertilizers and plant protection, 2 473 units of other agricultural equipment, which creates a shortage of equipment in the peak season of conducting agrotechnical work.

Based on the analysis of the park of agricultural machinery, agricultural producers need an additional 100,670 units of equipment, of which 26,139 units of tractors, 34,605 units of mounted and trailed equipment, 1 149 units of combine harvesters, 3,080 units of cotton harvesting machines, 9 951 units of forage harvesting equipment, 22 278 units of tillage equipment, 2,968 units of equipment for various types of fertilizers and plant protection and 500 units of other equipment.

At the same time, 55.1% of the existing equipment are morally and physically obsolete, needs to be updated at an accelerated pace, as this affects the increase in the productivity of cultivated land, the growth of crop yields, and, of course, the increase in exports of fruits and vegetables.

In the Republic of Uzbekistan, production facilities of various types of agricultural machinery of several national and world brands such as JSC Tashkent Plant of Agricultural Machinery, JSC Chirchik Plant of Agricultural Machinery, JSC Technolog, JSC Aggregate Plant, LLC Agrikhim, JSC Urgenchkormmash, LLC Uz CLAAS Agro, LLC UzKeysMash, LLC UzKeysTractor, LLC DD-Agroteckmash, Kuhn, LLC UzAgrotex Sanoat Invest, LLC Lemken-Chirchik, and LLC Amkodor-Agrotechmash, which produce tractors of various capacities, grain and fodder harvesting combine harvesters, mounted, trailed, road-building and specialized equipment, have been established.

From January 1, 2018, to June 30, 2018, the above enterprises cumulatively produced more than 6,000 units of equipment worth 1 449.5 billion UZS. At the same time, the growth rates of production and sales indicate the presence of demand for agricultural machinery.

What attracts investors to the Uzbek auto industry

• Industry has strong domestic demand. Agriculture in Uzbekistan in terms of production volume exceeds 20% of GDP, about 30% of those employed. It is one of the main sectors that ensure the sustainable development of the economy. A wide range of agricultural products is grown in Uzbekistan, including industrial crops such as cotton, oilseeds (sunflower, rapeseed, safflower), vegetables, fruits, melons and gourds, certain types of citrus fruits, and fodder crops, each of which requires not only universal agricultural machinery but also special.
• External demand for agricultural engineering products can be supported, at a minimum, at the expense of the neighboring states of Central Asia and Afghanistan, which do not have their own agricultural engineering with sufficiently developed agriculture.
• Agricultural engineering in Uzbekistan has a certain design base, the scientific-technical potential for its further development.
• A system of training personnel has been established, capable of using and producing, and designing agricultural machinery.

Thus, a chain of interconnected industries (the so-called cluster) allows relatively quickly create a competitive mechanical engineering industry that is efficient in the domestic and foreign markets.

The main areas of the industry

• further improvement of the legislative framework aimed at supporting the increase in demand, availability of upgraded agricultural machinery:
• preservation of existing benefits for enterprises of agricultural engineering, subject to an annual increase in the level of localization of not less than 5%;
• development and adoption of normative-legal acts aimed at introducing a progressive scale of utilization collection for agricultural equipment after 7 years from the production date, its repeated (secondary) implementation, as well as sending accumulated funds to finance the replenishment of working capital, implementation of investment programs of agricultural enterprises and financing the sale of finished products through specialized financial institutions;
• introduction of environmental standards in the import of finished products;
• creation of a normative-legal framework to finance export sales through a network of own leasing companies in foreign countries;
• creation of favorable conditions for further development of the agricultural engineering industry, its investment, and commercial attractiveness by organizing an industrial technopark of agricultural machinery with the participation of private and foreign capital;
• further development of service and dealer points;
• phased transition to a system of centralized procurement of components, raw materials, and supplies;
• adoption of specific measures aimed at reducing costs by updating the fleet of equipment, as well as revising the norms of costs of raw materials, and introduction of new energy-saving technologies;
• increasing production and sales volumes by presenting buyers with preferential leasing interest rates;
• raising the level of qualification of the industry employees
• development of research and development, the introduction of new types of energy-saving equipment into production.

Manufacture Opportunities  

Further development of research and development will help agricultural engineering enterprises to master new types of agricultural equipment.

Research work will be aimed at:

• development of a machine plume based on the requirements for carrying out agrotechnical measures for growing crops during tillage, sowing, and harvesting, its transportation, etc.;
• development of new types of high-performance and energy-saving equipment;
• creation of multi-functional equipment that will allow implementation of up to 4 land tillage, sowing, and planting operations at the same time;
• unification of designs of agricultural machinery;
• development of a design of a new domestic universal tilled tractor with increased ergonomic indicators.

Since investments in research and development work take quite a long time and significant financial resources, government support is expected to subsidize its development. Research work will allow the introduction of machinery adapted to the climate and soil of the Republic of Uzbekistan, taking into account the requirements for agrotechnical work, improve the production process, free from financial burden in the form of royalties paid to foreign partners.

Partial Production Facilities 

The direction of investment in deepening localization of products in 2018-2020 will allow mastering the component base of agricultural equipment. In addition, these events will allow developing the scientific-technical potential of the staff of the design and technology center in real conditions.

From 2018 to 2020, it is expected to master production of the component base for deepening the localization of agricultural equipment: tooling, molds, and dies; foundry metal products; tractor and other types of transmission gears; cabins of self-propelled agricultural machinery (expansion of production); rims; plastic and rubber products; hardware group of various types; electrical parts.