Skoda to begin assembling four models in Kazakhstan next year

Skoda Auto is expanding its previously announced partnership with Allur in Kazakhstan. On December 11, Martin Jahn, Board Member for Sales and Marketing, along with partner representatives in Astana, signed key documents shaping the future of this collaboration.

Beyond sales and production, the companies agree to enhance technical training in Kazakhstan as part of the memorandum of understanding (MoU). The commitments include assembling vehicles from Semi Knocked Down (SKD) kits as well as exploring the feasibility of local production from Completely Knocked Down (CKD) kits, potentially starting after 2025. During his visit, Jahn also met with Roman Sklyar, Deputy Prime Minister of Kazakhstan, to discuss strategic plans and the automotive industry in both countries.

Klaus Zellmer, Skoda Auto CEO, said: “Internationalisation is crucial for Skoda Auto, and re-entering the Kazakh market aligns well with our plan, including launching our brand in Vietnam. I am pleased with the rapid progress of our cooperation with our new manufacturing and sales partner in Kazakhstan, Allur. Following the announcement of our cooperation in October, we have now signed additional vital agreements, paving the way for assembling Skoda vehicles in Kazakhstan next year and establishing the framework for our future collaboration.”

Martin Jahn, Skoda Auto Board Member for Sales and Marketing, added: “Kazakhstan is a highly attractive market for us with significant growth potential, which dovetails perfectly with our internationalisation strategy. Our plan is to progressively begin producing four models in the first quarter, open dealerships in Almaty, Astana, Karaganda, and Shymkent as soon as possible, and officially enter the market and commence sales in the second half of February. Our long-term goal is to achieve a 5% market share by 2028.”

Local assembly of the Octavia, Kamiq, Karoq and Kodiaq from SKD kits will start gradually in first quarter of 2024. Produced at Skoda factories in Mladá Boleslav and Kvasiny, they will be assembled for the Kazakh market at a plant operated by Allur Company in Kostanay and distributed to local dealerships.

Feasibility assessment of CKD-based vehicle production by end-2024
Among the agreements signed by Skoda Auto and Allur is an MoU, which includes evaluating the feasibility of locally producing vehicles from CKD kits after 2025. If successful, this would lead to a more comprehensive manufacturing process at the production plant, including welding, painting, and final assembly, and would also allow for greater involvement of local suppliers. This collaboration between both companies would support employment in Kazakhstan as well as the Czech Republic. The final feasibility assessment will be completed by the end of 2024.

Skoda Auto and Allur have also committed to working together to strengthen and enhance technical training in Kazakhstan. The foundation of this collaboration will be exchanging knowledge about training young professionals who are preparing for new roles in the automotive industry.

An integral part of the collaboration will be building a network of authorised dealerships rolled out in the new corporate design. The initial showrooms will open in the coming months in the largest Kazakh cities. Customers in Almaty, Astana, Karaganda, and Shymkent will be the first to experience the services of Škoda Auto’s authorised partners. The official market entry and sales launch is slated for the second half of February, while the number of modern showrooms will increase throughout 2024.

Skoda’s internationalisation strategy continues
Skoda had previously announced that vehicle production for the Kazakh market would begin in early 2024. The vehicles will be manufactured at the plants in Mladá Boleslav and Kvasiny, with final assembly from SKD kits taking place at the Allur plant in Kostanay.

Skoda’s re-entry into the Kazakh market reflects the consistent implementation of its internationalisation strategy. In September 2023, the company had officially launched its sales operations in Vietnam. In addition, it had earlier taken over the strategic management of the Volkswagen Group’s Core volume brands for the entire ASEAN (Association of Southeast Asian Nations) region, aiming to leverage the combined potential for further growth. Skoda also strategically manages the Volkswagen Group’s activities in the rapidly developing Indian market.

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