FOREIGN INVESTMENT GROWING IN UZBEKISTAN’S AUTO INDUSTRY.

Germany’s Mercedes-Benz company and the Uzbek state concern Uzavtosanoat are planning a second joint venture in the Central Asian country. The project, to be initially capitalized at more than $50 million, envisages production of light-duty trucks (capacity: three tons) at Uzbek assembly plants. Mercedes-Benz already operates a plant for heavy-duty trucks in partnership with Uzavtosanoat in Horezm.

Uzavtosanoat has also launched a joint venture with South Korea’s Daewoo company known as UzDaewooAvto. That venture will assemble three types of Daewoo passenger cars. The factory near Andijan is planned to come on stream this March and is projected to produce 26,000 cars this year.

Finally, Uzavtosanoat and Turkey’s Koc Holding company, which has a joint venture with Iveco of Italy, are finalizing production plans under Iveco licenses at the automotive plant in Samarkand. That plant is to produce medium-capacity buses of 25-27 seats and semi-trailers for heavy-duty trucks (capacity: 25-35 tons). The project is being financed through a $75 million credit extended by Turkey for the upgrading of Uzbekistan’s automotive industry.

These automobile ventures share a common feature: initial assembly of vehicles from components shipped from the investing companies’ parent countries. In subsequent stages, the Uzbekistan-based plants will themselves produce a growing share of the components. These joint ventures are in a position to compete effectively with the Russian automotive industry for the Central Asian market. (8)

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