GM Uzbekistan to raise car prices

GM Uzbekistan to raise car prices

Baku, Azerbaijan, July 30

By Fikret Dolukhanov – Trend:

From Aug. 1, 2018, Uzbek automaker GM Uzbekistan will raise prices for cars, Uzbek media reported citing Chairman of the Board of the automobile company Uzavtosanoat JSC Shavkat Umurzakov as saying at the meeting of the International Press Club.

According to Umurzakov, the prices for the company's cars will grow by an average of 14 percent. The chairman of the board, however, noted that the company plans to provide discounts for consumers.

Explaining the increase in car prices, Umurzakov noted that such a move is caused not just by monopoly.

“The production capacity of the Asaka plant is 290,000 cars per year, but we produce only 160,000. Due to the fact that the plant operates only at 50 percent of its capacity, the cost of production becomes high. This affects the buyers' pocket and negatively affects the export potential of the enterprise,” the chairman of the board said.

Umurzakov's statement aroused a storm of public indignation. Many consider fighting against underproduction by raising prices an illogical move. Some even sound calls to boycott GM Uzbekistan products.

Uzavtosanoat has been regularly falling under the flurry of criticism and discussions in the media recently.

On July 24, during a speech at the Nuclear Physics Institute of the Academy of Sciences dedicated to the tasks and problems of science development, President of Uzbekistan Shavkat Mirziyoyev touched upon the problem of the low level of localization of products of the Uzbek car industry.

"...We are proud to produce cars, although in fact we are assembling them. The first car factory was built over 20 years ago, but spare parts are still purchased abroad. The question is: where is the science, where are the enterprises that implement its results? Why the young people not going into science?" the president said.

This was Mirziyoyev's second speech, in which he expressed dissatisfaction with the Uzbek automobile industry.

On June 26, Mirziyoyev has delivered a serious blow to the country's auto industry, which has been rather chaotic recently. Mirziyoyev noted that the automobile industry plays a vital role in the country's economy, however, production and exports have recently declined. The head of state criticized the widespread corruption, bribery, nepotism at all levels in the sphere.

The president reminded that there are a lot of debts in the structure of Uzavtosanoat JSC (the country's major car manufacturer). Several enterprises of the company completed 2017 with losses. For a number of years the export of cars was carried out at a price lower that the prime cost and no action was taken to actually reduce the latter.

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Follow the author on Twitter: @FDolukhanov

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