March 25, 2022

Automotive industry in Uzbekistan

1. Legal basis

2. Overview of investment programs in the automotive industry

3. The potential business interest of the investor

Legal basis

  1. Decree of the President of the Republic of Uzbekistan dated 27.10.2020 No. UP-6096 “On measures for accelerated reform of enterprises with state participation and privatization of state assets”
  2. Decree of the President of the Republic of Uzbekistan dated 14.01.2019 No. UP-5630 “On measures to radically improve the management system of state assets, antimonopoly regulation and the capital market”
  3. Decree of the President of the Republic of Uzbekistan dated 21.09.2018 No. UP-5544 “On approval of the Strategy of Innovative Development of the Republic of Uzbekistan for 2019-2021”
  4. Resolution of the President of the Republic of Uzbekistan dated 16.06.2017 No. PP-3067 “On measures to further improve the procedures for the sale of state property”
  5. Decree of the President of the Republic of Uzbekistan dated 01.06.2017 No. PP-3028 “On measures for further improvement of the management and the rapid development of the automotive industry for 2017-2021”
  6. The decree of the President of the Republic of Uzbekistan dated 17.01.2017 No. UP-4933 “On measures to further simplify procedures and accelerate the implementation of the state property for use in business purposes”
  7. Resolution of the President of the Republic of Uzbekistan dated 16.02.2011 No. PP-1478 “On measures for further development of production of heavy-duty vehicles”
  8. Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated 07.08.2009 No. 224 “On the establishment of an enterprise with foreign investments LLC “JV MAN Auto – Uzbekistan” (In extracts)
  9. Order of the Cabinet of Ministers of the Republic of Uzbekistan dated 21.02.2013 No. 79-f. On approval of the list of goods imported JV “JV MAN Auto-Uzbekistan” in the period from 1 January to 31 December 2013 and are exempt from customs duties (excluding charges for customs clearance)
  10. Decree of the President of the Republic of Uzbekistan from 25.06.2020 No. PP-4757 “On measures for the implementation of the project organization in the Republic of Uzbekistan for the production of light commercial vehicles “Volkswagen”
  11. Resolution of the President of the Republic of Uzbekistan dated 18.07.2019 No. PP-4397 “On additional measures for accelerated development of the automotive industry of the Republic of Uzbekistan”
  12. Resolution of the President of the Republic of Uzbekistan dated 01.06.2017 No. PP-3028 “On measures for further improvement of management and accelerated development of the automotive industry for 2017-2021”
  13. Resolution of the President of the Republic of Uzbekistan dated 13.06.2017 No. PP-3053 “On the establishment of an enterprise with foreign investments “Uzbekistan Peugeot Citroen Automotive”
  14. Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated 23.08.2004 No. 405 “On measures to improve the management structure of the automotive industry” (In extracts)
  15. Resolution of the President of the Republic of Uzbekistan dated 02.21.2008 No. PP-800 “On the establishment of an enterprise with foreign investments “General Motors Uzbekistan”
  16. Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated 20.07.2015 No. 199 “On measures for organizing the production of aluminum parts by high-precision injection molding”
  17. Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated 24.03.2015 No. 66 “On measures for the further development of the production of heavy-duty vehicles “MAN” (in extracts)
  18. Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated December 29, 2020 No. 812 “On additional measures to support the rental and rental of motor vehicles, the use of electric vehicles and motor vehicles, as well as the development of cycling in the country”
  19. Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated 31.01.2020 No. 55 “On measures to increase the localization of truck production and accelerate the attraction of investments in the automotive industry”

Overview of investment programs in the automotive industry

Full-scale reforms have been initiated or are already taking place in a number of sectors of the economy of Uzbekistan. The automotive industry is no exception. The general trends of the reforms are aimed at attracting foreign investment, introducing international standards of corporate governance and gradually reducing the state share in the economy through privatization.

In order to improve the corporate governance system of the automotive industry, to ensure its sustainable development in conditions of fierce competition in foreign markets and liberalization of foreign exchange policy, to increase the production of competitive products and deepen the localization of production of organizations of which Uzavtosanoat is a participant (shareholder), in accordance with the Decree of the President of the Republic of Uzbekistan No. PP-3028 dated 01.06.2017, a number of measures were provided, including the adoption of an investment program. Thus, the investment program of JSC “Uzavtosanoat” for 2017-2021. It consists of three parameters:

  • development of new models of vehicles and equipment;
  • modernization, technical and technological re-equipment of the organizations of JSC “Uzavtosanoat”;
  • localization of automotive components and basic materials.

List of investment projects for the development of new models of vehicles and equipment:

List of investment projects for modernization, technical and technological re-equipment of organizations of JSC “Uzavtosanoat”:

List of investment projects for localization of automotive components and basic materials:

In 2021-2022, it is also planned to establish production of a number of passenger cars in cooperation with Manas Savunma AS (Turkey), Beijing Automotive Group and Hebei Changan Automile Co. Ltd (China), Hyundai Motors and Evergreen Motors (Korea). More details about this investment program can be found from the Decree of the President of the Republic of Uzbekistan No. PP-4937 dated 12.28.2020.

The potential business interest of the investor

In accordance with the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. 812 dated 12/29/2020, in order to support the use of electric vehicles, it was envisaged to develop and submit to the Cabinet of Ministers of the Republic of Uzbekistan with the involvement of international consulting organizations and foreign experts by February 1, 2021, a draft Concept for the production of passenger cars and motor vehicles are driven only by an electric motor at the enterprises of Uzavtosanoat JSC. In addition, when forming the State Budget for 2021 and in subsequent years, the Ministry of Finance of the Republic of Uzbekistan should provide for the abolition of fees for the purchase and (or) temporary importation into the territory of the Republic of motor vehicles driven only by an electric motor, paid by the owners (users) of motor vehicles when they are registered with the internal affairs bodies. And finally, a number of ministries needed to develop, based on international practice, a “roadmap” for the organization of the installation of charging terminals for the maintenance of motor vehicles driven only by an electric motor, using modern technological systems, and submit it for approval to the Cabinet of Ministers.

In accordance with the Decree of the President of the Republic of Uzbekistan No. PP-4397 dated 18.07.2019, the main indicators of the development of the automotive industry of the Republic of Uzbekistan in 2019-2023 are considered to be the following:

  • increase in the annual production of passenger cars to 350 thousand units;
  • bringing the localization level of passenger cars to an average of 60 percent;
  • increase in the annual production of trucks and buses to 10 thousand units;
  • bringing the annual volume of car exports to 100 thousand units;
  • introduction of modern methods of corporate governance, as well as an automated accounting system “ERP”;
  • updating of the model range of cars, including the production of a new modern model of a passenger car, accessible to the general public;
  • attracting investors through the initial public offering (IPO) on the domestic and international stock markets of shares of at least two joint-stock companies that are part of Uzavtosanoat JSC.

It is planned to attract investments not only in the production of passenger cars but also trucks. More details about this can be found based on the Resolution of the Cabinet of Ministers No. 55 of 31.01.2020.