Uzbekistan Business & Economy - The Times Of Central Asia

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Automobile Industry

Automotive Shift in Central Asia: China Edges Out Russia

In the 2020s, Central Asia has emerged as an increasingly attractive market for the automotive industry. A combination of investment inflows, technological development, and improved logistics, much of it initiated by China, has fueled this transformation. Since the onset of the COVID-19 pandemic, China has rapidly expanded its influence in the region’s automotive sector and is becoming the dominant external supplier in import-reliant markets, even in countries with domestic manufacturing capabilities. Manufacturing Hubs and Import Markets The Central Asian automotive landscape reflects the region’s economic diversity. Uzbekistan and Kazakhstan serve as the main manufacturing hubs, while Kyrgyzstan, Tajikistan, and Turkmenistan rely heavily on imports. By the end of 2024, while the global automotive sector faced a slowdown, Uzbekistan recorded modest growth in car production, up 0.8% year-on-year. In contrast, Kazakhstan saw a 1.6% decrease. During the first seven months of 2025, Uzbekistan produced 212,200 passenger vehicles, a 3.5% increase compared to the same period in 2024. Truck production rose sharply by 28%, from 1,800 to 2,300 units. With a population of approximately 37 million, Uzbekistan remains the region’s industrial center. The state-owned UzAuto Motors, formerly GM Uzbekistan, dominates more than 90% of the domestic passenger car market. Models such as the Chevrolet Cobalt, Nexia, and Tracker are built on General Motors platforms and produced at the main plant in Asaka, which has a capacity of 280,000 vehicles per year. Some of this output is exported to Russia, Azerbaijan, and Georgia. In a bid to stay competitive with Chinese brands, Uzbekistan launched a joint venture with BYD in 2023 and announced the construction of a $1.5 billion electric vehicle (EV) plant in the Ferghana region with Chinese support. Kazakhstan’s key market players include Allur and Hyundai Trans Kazakhstan. Allur’s Kostanay plant produces up to 125,000 Kia, Chevrolet, Skoda, JAC, Jetour, and Hongqi vehicles annually, and accounts for 61% of the national output. Hyundai Trans Kazakhstan in Almaty has a capacity of 50,000 units, covering 31% of production. Two new car plants are expected to open in 2025. The first, a $200 million investment by Kia, will be located in the Kostanay region and marks the company’s first Central Asian plant. With a planned capacity of 70,000 vehicles per year, the move underscores Kia’s long-term commitment to Kazakhstan. “We are excited about the promising opportunities opening up in the Kazakh market. Kazakhstan's economy is developing dynamically and on a large scale. We see great potential for our business in this market,” said Kia President and CEO Ho Sung Song. The second plant, in Almaty, will assemble Chinese brands with a target of 90,000 vehicles annually. Rather than compete with Chinese imports, Kazakhstan has opted to localize production in partnership with Chinese manufacturers. Import-Dependent Markets and China’s Tailored Approach While Kyrgyzstan and Tajikistan host minor assembly operations, primarily with Chinese partners, their automotive fleets, along with Turkmenistan’s, are largely replenished through imports. Since 2020, shifts in global logistics have transformed China from an alternative supplier into the dominant source of vehicles in these...

Middle Corridor

How to Harness Momentum Along the Middle Corridor: Interoperability on the New Silk Road

When most people think of the “Silk Road,” they picture a single camel train inching across a tan horizon, blue-white porcelain strapped beside bolts of silk. That fairytale, however romantic, was never true. Medieval Eurasia operated on multiple, overlapping, and improvised routes, often seasonal. And frankly, for a Westerner at the far end, it scarcely mattered how the goods got there, only that they did. Then, oceanic shortcuts and the Americas rewired global trade; two world wars shattered old geographies, and the Iron Curtain sealed Central Asia into a blank space on Western mental maps. Now, the region is reopening on its own terms, and supply chains are being redrawn in real time. Suddenly, the term “Middle Corridor” has become trendy. The Caspian Policy Center held its 3rd Trans-Caspian Connectivity Conference in London in July this year, focusing on the theme “Harnessing the Momentum, Building on the Synergies.” The title itself implies a recognition of some “momentum” and some “synergies.” A couple of months after the London conference, I spoke by phone with David Moran, a former UK ambassador with extensive experience in the region, to ask him about what he thinks of the whole “New Silk Road” idea. His point is refreshingly unsentimental: stop imagining a line and start thinking of it as a web of interconnected channels. In practice, that means folding energy, digital, finance, and steel into a single operating picture so capital shows up on better terms; widening the frame from C5+1 to a Central Asia–South Caucasus–Turkey logic that actually matches how goods and electrons move; and fixing bottlenecks that are more about governance than concrete. We talked about quiet levers: insurance that prices climate risk properly, a digital spine that makes rail and the Caspian behave like one network, and the long-cycle drivers that turn logistics into strategy. Compound those gains, and pretty soon you’ve built something you no longer have to call “alternative.” “Alternative” lets officials kick decisions into next year; “strategy” forces sequencing, standards in definitions, and capital discipline today. It also resets expectations: this is not a clever detour around trouble, it is the backbone of a regional growth story that European lenders might just actually know how to price. Seen that way, the geography snaps into focus. On the Caspian, Aktau and Kuryk on one shore and Baku on the other form the hinge, while the BTK railway and Kazakhstan’s Altynkol–Zhetygen pull weight inland. Atyrau is the western Kazakh air node that connects workers, parts and schedules to the Caucasus, the Gulf, and Europe. Thread through the rest: Black Sea power interconnect ideas, subsea data routes, the hydrocarbon pipes already in place. Put it together and you have a web with redundancy, optionality, and recognisable standards built in. If there’s one real shift, it’s moving from projects to an operating plan. Moran puts it cleanly: “Go for a fully integrated regional connectivity strategy -- energy, digital, finance, infrastructure -- rather than working through sectoral initiatives separately.” Integration isn’t a slogan; it’s how you...

Economic Growth

Uzbekistan Emerges as One of Europe and Central Asia’s Fastest-Growing Economies

Uzbekistan is on track to be one of the five fastest-growing economies in the broader Europe and Central Asia region next year, according to the World Bank’s Europe and Central Asia Economic Update, Fall 2025. The report projects Uzbekistan’s gross domestic product will expand by about 6.2% in 2025 - well above the regional average amid an overall slowdown across emerging European and Central Asian markets. Overall regional GDP growth is expected to ease to roughly 2.4% in 2025, down from 3.7% in 2024, as weaker output in Russia drags on the aggregate. Central Asia as a whole continues to stand out. The World Bank notes that countries in the region are collectively growing around 5.9% - making it the fastest-growing part of Europe and Central Asia for the third straight year. Within that group, Tajikistan is also forecast to grow by 7%, Kyrgyzstan by 6.8%, and Kazakhstan by 5.5%. That performance keeps much of Central Asia well ahead of Europe’s advanced economies, which are expected to grow by just over 1% on average. Turkmenistan is excluded from the World Bank’s regional calculations because it does not publish internationally comparable economic data. For Uzbekistan, in particular, inclusion among the region’s top performers marks a sharp turnaround for a country that, less than a decade ago, was largely closed to global markets. By way of comparison, according to the World Bank, Uzbekistan’s economy is about eight times larger than Kyrgyzstan’s and roughly seven times larger than Tajikistan’s. In 2024, Uzbekistan’s gross domestic product was roughly $105 billion, compared with approximately $14 billion for Kyrgyzstan and $15 billion for Tajikistan. Remittances and Investment Fuel Expansion Rising income from abroad and expanding investment at home due to an increasingly investor-friendly climate are the twin engines of Uzbekistan’s boom. The World Bank attributes its upgraded forecast partly to stronger-than-expected remittances and higher capital spending. In the first half of 2025, remittances sent home by Uzbek workers - mainly from Russia, Turkey, and South Korea - jumped 27% year-on-year to reach around $8.2 billion, providing a surge in household consumption. At the same time, both public and private investment are climbing. Government spending on infrastructure and industrial projects remains high, and foreign capital is flowing in at record levels. According to Uzbekistan’s Ministry of Investment, Industry and Trade, foreign direct investment reached about $10 billion in 2024, the highest on record. Projects span energy, agriculture, and information technology, with investors from South Korea, China, the Gulf states, and Europe among the most active. The International Monetary Fund’s 2024 Article IV Consultation observed that “robust investment and resilient consumption” have kept growth well above the overall regional average. Reforms Since 2016 Have Laid the Groundwork This acceleration did not happen by chance. Since President Shavkat Mirziyoyev came to power in 2016, Uzbekistan has pursued a series of market-oriented reforms to dismantle decades of economic isolation and stagnation. The government unified the exchange rate, lifted currency restrictions, and simplified customs and tax rules. It began privatizing state...

Bilateral Trade

Uzbekistan-Turkey Trade Reaches $2.6 Billion as Customs Cooperation Deepens

Uzbekistan and Turkey have significantly expanded their trade partnership, with bilateral trade turnover reaching $2.6 billion, according to the State Customs Committee of Uzbekistan. The milestone was announced during the fifth meeting of the Uzbekistan-Turkey Joint Customs Council, held in the historic city of Khiva. Friendly ties between the leaders of the two countries have laid the foundation for enhanced cooperation across a broad range of sectors, including politics, trade, investment, culture, and humanitarian initiatives. Since the inaugural Joint Customs Council meeting in 2018, trade turnover between the two countries has grown by 35%, rising from $1.9 billion to $2.6 billion by the end of 2024. Officials called this an impressive achievement in the context of ongoing global economic challenges and noted that there is still considerable room for further growth through deeper customs collaboration. One of the most impactful developments has been the 2022 agreement on the exchange of advance information on goods and vehicles. The agreement is currently undergoing preparations for full-scale implementation. Additionally, the two countries have improved mechanisms for foreign trade data exchange and made progress in addressing statistical discrepancies during a bilateral meeting in Samarkand in September. The next round of talks on this issue is scheduled to take place in Turkey. Another key topic at the Khiva meeting was the mutual recognition of authorized economic operators (AEOs), a proposal first introduced at the 11th meeting of customs authorities from Turkic states, held in Kazakhstan. A draft agreement on mutual recognition is currently under review by the Turkish side. Over the past five years, Uzbekistan’s trade volume managed by AEOs has more than doubled, increasing from $1.3 billion in 2020 to $2.7 billion in 2024. Council members also reviewed a joint cooperation plan for 2025-2026, which aims to further strengthen economic relations and streamline customs procedures.

Gas Exports

Russian Gas Exports to Central Asia Rise 15% Amid Growing Regional Demand

Russian natural gas exports to Central Asia increased by 15% in the first eight months of 2025 compared to the same period in 2024, Gazprom CEO Alexey Miller announced at the St. Petersburg International Gas Forum (PMG Forum 2025), according to TASS. Miller cited rapid economic growth across the region as the key driver of rising energy demand. He projected that Central Asia’s economy could expand by as much as 60% over the next five to six years, with natural gas playing a central role in meeting growing energy needs. “When we compare the first eight months of 2025 with the same period in 2024, the volume of Russian gas supplied to Central Asia, namely Uzbekistan, Kyrgyzstan, and Kazakhstan, rose by 15%. These are substantial volumes,” Miller said. Miller also pointed to the importance of major infrastructure initiatives, including projects under the Power of Siberia-2 megaproject, in expanding gas supply routes to the region. In 2024, Gazprom reported a doubling of gas exports to Central Asia between January and August. At that time, deliveries to Uzbekistan had reached maximum technical capacity through the Central Asia-Center pipeline, meeting peak demand typically seen during the coldest months of winter. The latest increase in exports highlights Central Asia’s growing strategic value to Russia as an energy market, as well as deepening energy cooperation between Moscow and the region.

Airports

Japan to Build Central Asia’s Largest Airport in Uzbekistan by 2028

Japan’s Sojitz Corporation is set to launch one of Central Asia’s most ambitious infrastructure projects: the construction of a new international airport in Tashkent. According to Express Asia, construction will begin in 2025 and is expected to be completed by 2028, with a total project cost estimated at $1 billion. The airport will be developed through a public-private partnership (PPP) with Saudi Arabia’s Vision Invest. Japan’s investment is projected to reach several hundred million dollars. Once completed, the airport will have a capacity of up to 20 million passengers annually and support more than 40 take-offs and landings per hour, making it the largest aviation hub in Central Asia. Sojitz brings experience in airport development from projects in Japan’s Kumamoto and Okinawa prefectures, as well as on the Pacific island of Palau. In Uzbekistan, its activities extend beyond aviation: in partnership with Turkey’s Rönesans International, the company is planning an 800-bed hospital in Samarkand, a 1 GW wind power plant, and a 1.6 GW thermal power plant. Driven by consistent GDP growth of around 6% per year, Uzbekistan continues to attract Japanese investment, bolstered by favorable tax policies and a 15% corporate tax rate. The number of Japanese companies operating in the country has doubled over the past five years to 54. Among them, Toyota Tsusho, through Eurus Energy Holdings, is developing a 500 MW wind power project, while Marubeni is collaborating with UAE firms on a wastewater treatment facility. In 2024, President Shavkat Mirziyoyev met with a Japanese delegation led by Tadashi Maeda, Chairman of the Japan Bank for International Cooperation (JBIC), and representatives of Sojitz. The parties agreed on a three-year cooperation program with JBIC and a strategic roadmap with Sojitz for future projects in high-tech sectors. JBIC currently supports over $3.7 billion in joint ventures across Uzbekistan’s petrochemical, textile, energy, and infrastructure sectors. Sojitz also reaffirmed its commitment to expanding its footprint in the country, including its role in the Syrdarya II IPP project, one of Uzbekistan’s largest planned power generation facilities.