Chevrolet vs China: The Battle for the Future of Uzbekistan’s Auto Industry
ANDIJAN -- Spend long enough in Uzbekistan and you become adept at reading numberplates. While in Paris or Los Angeles, you will generally identify your taxi by its color and its manufacturer; try doing that in Uzbekistan, and you run into a problem: for the past two decades or so, the color and manufacturer have invariably been White and Chevrolet. “Yep, it’s true,” laughed Alisher, as I remarked on this when he collected me from Andijan train station. “90% of the cars are Chevrolets, and 80% of them are white.” But this era of monochrome monopoly may be coming to an end. With the electric vehicle (EV) revolution sweeping the world, Chinese companies have Chevrolet’s kingdom in their sights. A Levy for the Chevy Islam Karimov, Uzbekistan’s first president, was alone among the leaders of former Soviet republics in being a trained economist. Schooled in the planned economy, his powerful state acquired control over key industries and sought to make Uzbekistan self-reliant. It did a deal with South Korean conglomerate Daewoo to open its first factory in Uzbekistan in 1996, while slapping huge tariffs on all cars coming into the country from abroad. Daewoo, caught up in the Asian Financial Crisis in 1998, sold its auto arm to General Motors in 2002. The Detroit giant saw little wrong with the deal they had inherited in Uzbekistan, and so continued to produce Daewoo cars but now under their Chevrolet branding. The partnership transformed streets all across the country, with practically the only other cars to be seen on the roads being old Ladas from the Soviet period. [caption id="attachment_29761" align="aligncenter" width="1600"] A Kia hoarding above, naught but Chevrolet's below; image: Joe Luc Barnes[/caption] This lack of choice nevertheless provided jobs and an industrial base for the country’s auto industry. “I am very proud that Uzbekistan has built such an industry,” said Aziz Shukurov, CEO of A Group, a chain of car dealerships and owner of the nation’s largest network of service stations. “Today, more than one hundred companies operate in the local automotive industry producing parts for the vehicles; a lot of technology has been transferred over the years with tens of thousands of people employed. To my mind, a strong local automotive industry is a substantial asset for any country.” Meeting Mr. Market After Karimov died in 2016, his successor, Shavkat Mirziyoyev, began to embrace the free market. Close to a decade later, Tashkent throughfares are home to ever more foreign brands. Most prominent are South Korea’s Kia and Hyundai and China’s BYD and Changan. “The new president started opening up the country from 2017, giving access to foreign institutions and companies to the Uzbekistan market,” said Farkhodjon Israilov, an expert who specializes in attracting foreign investment into the country. In 2019, the government removed import duties and excise taxes on EVs. Given the growing popularity of EVs since then, the state-owned UzAuto Motors partnered with BYD to open one of only two operational production facilities outside China – the...
