| NATIONAL ACTIVITY
ACMA MISSION TO UZBEKISTAN : JUNE 18-22, 2001
Sluggish domestic demand, stagnant
European markets and recession affected US, have challenged
the Indian auto component industry to explore new markets
for its products. China, in the meanwhile, has made
export markets more competitive with its low priced
products. Cultivating new export destinations, therefore,
would be one way to sustain export growth for the industry.
Mr. K. Kejriwal, ACMA Vice President,
lead the ACMA Delegation which was a follow through
to the MoU signed between ACMA and the Uzbek Automobile
Industry Association (Uzavtosanoat) in 1998 when Mr
Islam Karimov, President Uzbekistan, visited India and
invited businessmen to invest in his country.
It was, the very first mission of its kind, to this
region.
On the disintegration of the Soviet
Union, the Uzbek automotive market went through major
changes. The first automobile production started in
1996. The industry, with modern manufacturing facilities
set off on the right foot, helping the automotive sector
to achieve a growth rate of 30% - one of the fastest
growing industries in the country. The average age of
vehicles which is generally over 20 years, has great
impact on the fairly large after-market. The many administrative
and control measures taken by the Government on import
substitution, has given advantage to the country's post
independence macro-economic performance.
| total investment in the industry,
more than US$ 1 billion |
| total import of components
in 1999, US$ 500 million |
| major imports from Korea and
Turkey |
| India accounts for a mere 1%
of this import |
UZ-Daewoo (a 50:50 JV between the Uzbek
Government and Daewoo of Korea) is one of Uzbek's two
vehicle makers. The Company manufactures the TICO &
DAMAS - orginal version of Maruti 800 and the Van. It,
also, manufactures the Nexia (like the Cielo) and Production
of Matiz starts from 1st September 2001. These vehicles
are made in India with a high level of local content
and Indian component industry, therefore, has a promising
potential to export parts to Uz-Daewoo which imports
most components as CKD Kits from Korea.
- An un-favourable trade balance in 1996 &
1997.The country, since, has moved towards a
favourable net inflow of US$ 270 ml in year
2000.
- The automobile industry contributes 5% of
the country's total GDP.
|
| UZBEK COMPONENT
MANUFACTURERS |
| 100 component manufacturers |
| few of these in the organised sector |
| 7 JVs set up with renowned Korean partners
manufacturing critical parts needed by Uz-Daewoo |
| JVs designed to produce for 2,00,00
cars annually |
| Localisation about 26% - some parts
imported & assembled while the balance of components
has raw material imported from Korean JV partners |
| Raw material stocks are quite high,
going up to more than 30 days in some cases |
| Most companies have very low stocks
of finished goodsh)Value addition is limited, so
far |
The Association's present policy to
expand local production of components and spare parts
change assembly operations of Uz-Daewoo and indigenise
production, was influenced by the 80% imports resulting
in huge outflow of hard currency. Export of Uz-Daewoo
vehicles to neighbouring countries was the major contributor
to currency reserves but financial crunch hitting buyers,
like Russia, had an adverse effect and gave Uzbekistan
reason to look for new vendors, offering both quality
and competitive costs.
The two day interaction was extremely useful and the
one-to-one meeting with Uz-Daewoo's overseas vendor
development team, most productive.
The second producer, Samkoc,
in Samarkand, manufacturers mini-buses based on the
IVECO technology. They have a JV with a Turkish CV manufacturer
(Koc Group) and produce about 1,500 buses annually.
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