“We need to be very careful when reducing duties for imported cars to protect our local manufacturers” – Uzavtosanoat

Although integration into the world economy is a necessary process, when it comes to reducing duties on foreign-made cars, we have to be very careful in terms of interests of the state and people, Deputy Chairman of the Board at the JSC Uzavtosanoat Azizbek Shukurov said.

During a press conference on February 5, Azizbek Shukurov declared the followings:

“We often read materials of economic research centers, which in various ways present pieces of information about how the economy is developing in different countries. We need to understand one thing – does the country want to be raw or developed? These two concepts do not coincide with each other. If we reduce the duty, the world automakers will enter the market. We produce 200-250 thousand cars and Volkswagen – 10 million. Who will have a better product, or who will have a better cost?”

Azizbek Shukurov gave an example from the US economy: in 2013, electric vehicle manufacturer Tesla announced its intention to build a factory for the production of lithium-ion batteries Gigafactory. After the announcement of Ilon Mask, a competition broke out between governors of six states in order to attract the Gigafactory into their territory. It was won by the governor of Nevada, because the state provided Tesla with tax preferences for $1,4 billion. 

“The United States of America are lobbying for free trade, equality in business, and so on,” the deputy head of the company “Uzavtosanoat” said.

“We have to be very careful here, we should always protect our manufacturers,” Mr. Shukurov concluded.

He gave another example regarding monopolies. According to him, the United States was able to stand on its feet at the expense of two strong monopolists – the oil corporation “Standard Oil” and the steelmaking “US Steel”.

“If we look at the history of South Korea, Japan and other developed countries, we can see that they grew up due to strong companies, monopolies. I am not saying that monopolies are good or bad. I just note that any developed state has passed through this stage,” he noted.

While maintaining the current growth rate of the economy, it is expected that within 10 years, volume of the Uzbek automobile market will be 400,000 cars per year. As part of a long-term concept until 2030, “Uzavtosanoat” intends to choose the most appropriate path that will meet interests of the people and the state in order to meet the needs of this market, the leader of the company said.

“Japan produces about 9 million cars, it has about 8−9 manufacturers. When there is a scale, the car company begins to develop. How is Volkswagen evolving? The company bought Audi, Porsche, Bugatti, Ducati, Scania, Škoda, Lamborghini and others. Volkswagen invests, buys factories for scale and enters new markets. Or Renault – it concluded an alliance with Nissan and Mitsubishi. In the automotive industry, the scale is in the first place. When it increases, the company develops – it helps supply affordable and high-quality cars to our people. We will choose the most appropriate way of development,” he stressed.

In addition, a head of the strategic development department at “Uzavtosanoat” Rustam Kadirov noted that large automobile companies are thinking about their business interests when they enter the markets. Currently, “Uzavtosanoat” is also considering social aspects.

“Production, personnel and technologies should be developed in Uzbekistan. We are not against large companies, but we have certain conditions for localization, work with personnel. For example, only for GM Uzbekistan, there are 30–40 localization companies that supply components. Many companies see this as a long-term investment, which may force them to retreat. Our main goal is to improve the investment environment so that an investor comes here and confidently invested his money,” he said.