Skoda Auto to re-enter Kazakhstan market

Skoda Auto to re-enter Kazakhstan market
The Kodiaq is one of three SUVs Skoda will assemble in Kazakhstan. / Alexander Migl, cc-by-sa 4.0
By Kanat Shaku in Almaty. October 11, 2023

Czech carmaker Skoda Auto has announced that it is poised to re-enter the Kazakhstan market.

The market return, conducted through a sales and production partnership with Allur Company, will include the production of four Skoda models—the Kodiaq, Kamiq and Karoq SUVs and the Octavia five-seat family car—in Kazakhstan from early 2024.

Anticipating local market growth, Skoda, a Volkswagen subsidiary, pointed out that only 186 cars are registered per 1,000 residents in Kazakhstan compared to 567 per 1,000 in the EU.

Skoda—which took a hit from closing its Russia business earlier this year amid the fallout of Moscow’s war in Ukraine—previously operated in Kazakhstan from 2005 to 2021, selling more than 23,000 vehicles in the country. The partnership with Allur Company will oversee regional operations.

Starting in 2024, cars manufactured in Mlada Boleslav and Kvasiny in the Czech Republic will be assembled in Kazakhstan at an Allur Company plant in Kostanay and distributed to local dealerships.

Skoda Auto anticipates overall Kazakhstan car market sales will exceed 200,000 units over the next five years. The company aims to capture the growth and maintain a market share of 5% between 2024 and 2028.

The company, which in July said it was "ready to take the necessary steps to protect our rights" after the sudden unauthorised reappearance of its cars on the Iran market, said its re-entry to Kazakhstan aligns with Skoda Auto's broader internationalisation strategy. The firm recently launched its brand in Vietnam and is leading the Volkswagen Group's 'Brand Group Core' in the Asean region. Also, Skoda Auto oversees the Volkswagen Group's activities in the rapidly growing Indian market.

Partner Allur Company maintains a “strong” presence in car production, components, spare parts and servicing in Kazakhstan, Skoda said. Allur held a market share of 44.4% in 2022, making it the largest automotive group in the region.

“Kazakhstan presents an exciting opportunity for Škoda Auto as our internationalisation accelerates. This marks a return to a market with promising potential, as currently less than one-fifth of the country’s residents own a car. To tap this potential, we have found a strong partner in Allur Company, which will be supporting us with vehicle production and sales,” Skoda Auto CEO Klaus Zellmer said.

“Next year, we plan to open 15 showrooms in major Kazakh cities, such as Astana, Almaty, Shymkent and Kostanay. We will be offering customers not only our bestselling Octavia but also our globally successful Kodiaq, Kamiq and Karoq SUVs. The SUV segment is now the second-largest in the market, and we are presenting a modern and attractive model range that will resonate with customers in the region,” Skoda Auto board member for sales and marketing Martin Jahn said.

Credit: Skoda Auto graphic.