Kazakhstan
Kazakhstan is the second-largest republic of the former Soviet Union, after Russia, and the ninth-largest country in the world in territory. The country has an abundance of natural resources - including oil, gas, coal, uranium and other mineral deposits - and has exploited these resources to build Central Asia’s leading economy. The country is emerging as a major transport and logistics hub in the region, linking the large and fast-growing markets of China and South Asia to those of Russia and Western Europe by road, rail and a port on the Caspian Sea. Kazakhstan presents a trade gateway to a market of about 150 million consumers in Caspian Sea countries, 50 million in Central Asia, and 300 million in Western China.
Kazakhstan's transport infrastructure is inadequate and urban transit is increasingly dominated by automobiles. The Economist Intelligent Unit estimates that the number of cars on the road reached nearly 5 million in 2019 and forecast that it will surpass 6 million by 2025. The car ownership rate, estimated at 279 vehicles per 1,000 people in 2020, is fairly high compared with other post-Soviet republics, and is comparable to the rate of car penetration in Russia. It is expected to reach 322 per 1,000 people by 2025, reflecting growing sales, a low scrappage rate and slowing population growth.
The Kazakhstan automotive sector is small but growing. Despite economic fallout from the COVID-19 pandemic, in 2020 car sales in Kazakhstan increased 25.8 percent over the same time last year. Dealers sold 79,374 cars totaling $1.7 billion. Of those, 71.6 percent were cars produced or assembled in Kazakhstan. Last year Kazakhstanis bought 80,800 new cars, including 22,527 imported vehicles and 56,867 locally produced vehicles. The government will continue to stimulate domestic vehicle assembly and production, which will expand rapidly from a low base. The Association of Kazakhstan Auto Business reported a 53.2% jump in domestic vehicle production in January-October 2020, to nearly 60,000 units.
Summary
Market Entry
A growing middle class and a rise in real incomes have increased demand for quality products in Kazakhstan. Inexpensive Russian and Chinese goods flow readily across Kazakhstan’s borders, but Western goods and expertise are also in demand. In some cases, consumers are willing to pay more for imported goods and services that offer higher quality and innovation. Customer service in Kazakhstan lags; providing customers with after-sales service could give companies advantage in the market. Most exporters into Kazakhstan find using local distributors or product representatives an easy first step for entering the market. It is not uncommon to partner with a firm that is involved
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