Škoda Auto, a prominent member of the Volkswagen Group, is set to make a strategic return to the Kazakh automotive market starting next year. This decision is driven by the company's recognition of the considerable growth potential in the region.
The Kazakh market is currently underpenetrated, with less than one-fifth of the country's residents owning a car. Škoda's CEO, Klaus Zellmer, expressed excitement about this opportunity, emphasizing the company's internationalization strategy.
Assembly in Kazakhstan: Semi Knockdown Kits
To facilitate its presence in Kazakhstan, Škoda will adopt a unique approach by sending semi-knockdown (SKD) kits of four models to Kostanay for assembly. The models, including popular SUVs like Kodiaq, Kamiq, and Karoq, as well as the Octavia compact, will be produced at Škoda's plants in Kvasiny and Mladá Boleslav in the Czech Republic.
Allur Company in Kazakhstan will be responsible for assembling these kits and contributing to the distribution of vehicles to local dealers.
Strategic Partner: Allur Company
Škoda Auto has identified Allur Company as a strong partner in realizing its ambitions in the Kazakh market. Allur will play a crucial role in both vehicle production and sales. The collaboration aims to tap into the untapped potential of a market where car ownership is relatively low. The company plans to open 15 showrooms in major cities in Kazakhstan in the coming year, further strengthening its foothold in the region
Market Growth Projections: Ambitious Targets
With an optimistic outlook, Škoda Auto envisions significant growth in the Kazakh automotive market. Sales volumes are forecasted to surpass 200,000 units within the next five years. This ambitious target reflects the company's confidence in the market's potential and aligns with its broader strategy for international expansion.
Škoda's Past and Future in Kazakhstan
Škoda has a history in Kazakhstan, having operated in the country from 2005 to 2021. During this period, the company delivered over 23,000 vehicles to customers. The decision to re-enter the market signifies a renewed commitment to leveraging the evolving dynamics of the Central Asian automotive landscape.
Contributing to Central Asia's Automotive Resurgence
Škoda's return to Kazakhstan is part of a broader trend of automotive regrowth in Central Asia. The region has witnessed the establishment of new assembly plants in countries like Kazakhstan, Kyrgyzstan, and Uzbekistan.
Notably, Chinese carmakers, including BYD, have shown significant interest, with plans for a plant in Uzbekistan. This resurgence is not only driven by local market potential but also by the opportunity to export to Russia, which is facing challenges in its automotive industry.
In conclusion, Škoda Auto's strategic move into Kazakhstan underscores its commitment to exploring and capitalizing on emerging automotive markets. By employing innovative approaches such as SKD kits and forging partnerships with local entities like Allur Company, Škoda aims to play a pivotal role in the growth of the Kazakh automotive sector.
