27.06.2023

Why is it important to develop mechanical engineering in Kazakhstan

Industry projects receive financial support through the holding Baiterek

According to Baiterek NMH JSC, the automotive industry has become one of the growth leaders in the engineering industry. Why the state supports this industry, which projects are funded and what effect should be given to the state. The Managing Director of JSC "NUH Baiterek" Yerzhan Yelekeyev.

- The state has identified the automotive industry as a priority industry. Yerzhan Irakovich, what is the importance of the industry?
- The state is actively paying attention not only to the automotive industry, but and the entire engineering industry in general. It is wider and includes including the automotive industry. It must be acknowledged that today it is one of the growth leaders within the engineering industry.

- Why did this happen?
- I believe that, first of all, due to the fact that our country has large Kazakh entrepreneurs who believed in the automotive industry and ventured to invest heavily in this complex and technology business. Without their optimism and firm faith, we have not achieved such results.

On the other hand, the state supported the initiative of the Kazakh business by creating the necessary conditions. State financing, automakers are partially exempt from taxes and payments. This is what many countries do that want to support various sectors of the economy in the early stages of development.

- Why is it important to support the automotive industry?
- The automotive industry is a technologically complex industry in which many people are involved. The analysis shows that one workplace in the auto industry creates ten jobs in related industries. Thus, the state provides stable work for our citizens.

The Kazakh auto industry has a relatively young but turbulent history development. About 20 years ago, the total production of cars in our country did not exceed 3 thousand cars a year. At the end of 2022, the total car production exceeded 113 thousand cars. For 20 years car production increased 37 times!

We all understand that in order for the industry to stand firmly on its “feet”, various support measures, especially at the stage of its inception and the state, clearly understanding its role, has provided and continues to support the industry both financially and non-financially tools. For example, Baiterek NMH JSC finances large car factories.

And despite the current progress, it should not stop us. Much still to be done. For example, we have achieved quantitative indicators, and today we need to strengthen the qualitative ones. Need to
understand that in any country any industry, and the automotive industry is not is an exception, has its own stages of development.

At the very beginning, our production of cars was produced by the method SKD assembly (Semi Knocked Down), i.e. brought to our factories components ready for assembly. Now large automakers are actively mastering small-knot assembly (Complete knock-down). This is a more technologically complex process, when the factories produce welding, painting, and the assembly itself consists of hundreds details.

For example, Baiterek NMH JSC finances the construction of the Astana-Motors for the production of three of the most famous Chinese brands: Changan, Chery and Haval with a production capacity of more than 90 thousand cars per year. This plant will produce cars using the SKD method. We have several such projects under consideration.

Thus, we see that in the next three to five years the volume production of Kazakhstani cars can grow another four times and exceed 400 thousand cars per year. And more than half will be issued small-knot assembly method.

- Was there an analysis whether such a number of cars are in demand in our home market?
- It is important for the state not only to ensure the domestic market, but also diversify the economy. We all see that now we're heavily addicted from world oil and gas prices. Our task is to make sure that in the structure The economy was dominated by high-tech industries. Recent geopolitical events in our region have opened a “window” opportunities for our automotive industry, and these definitely need take advantage. Our country is able to export cars to neighboring countries.