The government of Uzbekistan made a decision to increase the prices of automobiles manufactured by the General Motors Uzbekistan plant, CJSC (closed joint-stock company) for 20% on average in May this year. So, the price of Damas increased for 29%, Matiz – for 22%, Nexia and Lacetti – for 20% and Captiva – for 16%.
At the same time the situation in the car market remains tense, there are still some problems with purchasing the vehicles. Nowadays it became normal to pay for an automobile and wait from 6 months to 1 year to get it. Practically, regular intervention of the government into the country’s economy in whole and particular into the Uzbek car industry caused in the situation when republic can not satisfy the internal requirements of the country. Meanwhile, the announced number of produced automobiles is 240 000 cars a year.
According to the sources from the Cabinet of Ministers of Uzbekistan, the increase of prices for the domestic automobiles was planned by the Ministry of Finance long ago, as the piecing of budget holes by Rustam Azimov always has been fulfilled at the expense of the inhabitants, but not at the expense of increase the effectiveness of country’s economy in whole. With the efforts of the head of the Ministry of Finance the financial-economic system of Uzbekistan has turned into a huge financial pyramid that requires more financial aid at the expense of increasing the price of housing and communal services, car industry products and other sectors of the Uzbek society. From the beginning of world crisis in 2008 the prices in the whole world have been decreasing, but the production of the General Motors Uzbekistan increased for 4 times over this period.
It must be noted, that customs duties for automobiles that were not produced in Uzbekistan run up to more than 100% from the price of automobile. Thereupon, in spite of the regular increasing the prices for the domestic automobiles, the consumers have to buy local cars because the imported car will be more expensive.
The protective measures initiated by Rustam Azimov in order to protect the local automobile manufacturer are not being considered and estimated as a rule. It is not a secret that car industry of Uzbekistan has turned into one of the main sources that provide the country budget with cash and foreign currency. For example, the car industry receives more than 1 trillion of Uzbek sums profit from the sales of automobiles in internal market, and about US $ 1 billion from the car export.
Meanwhile, as a result of the measures taken by Rustam Azimov in order to protect the local manufacturer, starting this year it will be impossible to import the production of General Motors Uzbekistan to Ukraine. This is a decision of the Ukrainian government. According to the opinion of Ukravtoprom association the Uzbek side has broken the intergovernmental agreement on free trade, particularly the establishment of excise tax rates for the products produced by Uzbek manufacturers and products imported into Uzbekistan made impossible the export of cars from Ukraine to Uzbekistan. The specialists of the association note that because of the new excise rates, the prices of imported Ukrainian car increase for one and a half time. It makes them uncompetitive in the internal market of Uzbekistan.
The main danger produces this precedent itself, because following Ukraine the main importers of Uzbek cars – Russia, Kazakhstan, Belarus, Azerbaijan and Turkmenistan can refuse the Uzbek cars. In this case the population of Uzbekistan will suffer from it directly: the pricing policy will have an effect as the next increase of the cars prices.
According to the opinion of specialists the existing pother in dealer enterprises of car industry directly connected with population’s distrust to the financial system of the country. In all civilized countries the citizen who has some savings deposits them with the bank and earns the interest. But in Uzbekistan against the background of incomprehensible bank system, lack of confidence in governmental and commercial bank, the purchasing of cars became the profitable capital investment.
It is notable that the car market of Uzbekistan is unique. Uzbekistan is a unique place where old car may be more expensive than new one. So, having bought any model of General Motors Uzbekistan cars at automobile sales centre, after a year you can sale it in a specialized market for 10-15% as much than at automobile sales centre.
Another factor that causes indignation of the population is the selling the cars for foreign currency. It is impossible to get foreign currency at the exchange offices. People who want to buy car must exchange the foreign currency in the “black markets”. But it is a criminal offence.
The reason of the establishment of such kind of cars purchasing system was the deep-rooted corrupted system in financial policy, when the conversion of currency is realized for big “kickback” that comes up to 40-45% from the amount sometimes. It is unnecessary to remind that Rustam Azimov controls the conversion of currency also.
In spite of sizeable currency earnings from cars export the Ministry of Finance is unable to provide timely conversion of Uzbek sum for domestic manufacturers. If in early 2000 the demand of General Motors Uzbekistan in conversion of currency was US$ 300-400 million (this period they were producing about 30 000 cars a year), now they are producing more than 240 000 cars a year and this rate increased up to US $ 900 000. Meanwhile the amount of the conversion did not change.
The crediting for vehicles is also canceled and it does not permit middle class people to hope that they can buy a car some day. However, crediting, a main tool of banks’ financial policy, does not exist in Uzbekistan actually. The limitations and requirements to receive credits are very tough, making it impossible to get loan in banks. According to the opinion of Rustam Azimov thereby it eliminates the bank risk. However, the financial system is deficient without reasonable risks even in crediting, and Uzbekistan has been demonstrating it for a long time. According to the specialists’ opinion it is connected with an extremely incompetent monetary policy led by Rustam Azimov.
Anatoliy Voloshin
At the same time the situation in the car market remains tense, there are still some problems with purchasing the vehicles. Nowadays it became normal to pay for an automobile and wait from 6 months to 1 year to get it. Practically, regular intervention of the government into the country’s economy in whole and particular into the Uzbek car industry caused in the situation when republic can not satisfy the internal requirements of the country. Meanwhile, the announced number of produced automobiles is 240 000 cars a year.
According to the sources from the Cabinet of Ministers of Uzbekistan, the increase of prices for the domestic automobiles was planned by the Ministry of Finance long ago, as the piecing of budget holes by Rustam Azimov always has been fulfilled at the expense of the inhabitants, but not at the expense of increase the effectiveness of country’s economy in whole. With the efforts of the head of the Ministry of Finance the financial-economic system of Uzbekistan has turned into a huge financial pyramid that requires more financial aid at the expense of increasing the price of housing and communal services, car industry products and other sectors of the Uzbek society. From the beginning of world crisis in 2008 the prices in the whole world have been decreasing, but the production of the General Motors Uzbekistan increased for 4 times over this period.
It must be noted, that customs duties for automobiles that were not produced in Uzbekistan run up to more than 100% from the price of automobile. Thereupon, in spite of the regular increasing the prices for the domestic automobiles, the consumers have to buy local cars because the imported car will be more expensive.
The protective measures initiated by Rustam Azimov in order to protect the local automobile manufacturer are not being considered and estimated as a rule. It is not a secret that car industry of Uzbekistan has turned into one of the main sources that provide the country budget with cash and foreign currency. For example, the car industry receives more than 1 trillion of Uzbek sums profit from the sales of automobiles in internal market, and about US $ 1 billion from the car export.
Meanwhile, as a result of the measures taken by Rustam Azimov in order to protect the local manufacturer, starting this year it will be impossible to import the production of General Motors Uzbekistan to Ukraine. This is a decision of the Ukrainian government. According to the opinion of Ukravtoprom association the Uzbek side has broken the intergovernmental agreement on free trade, particularly the establishment of excise tax rates for the products produced by Uzbek manufacturers and products imported into Uzbekistan made impossible the export of cars from Ukraine to Uzbekistan. The specialists of the association note that because of the new excise rates, the prices of imported Ukrainian car increase for one and a half time. It makes them uncompetitive in the internal market of Uzbekistan.
The main danger produces this precedent itself, because following Ukraine the main importers of Uzbek cars – Russia, Kazakhstan, Belarus, Azerbaijan and Turkmenistan can refuse the Uzbek cars. In this case the population of Uzbekistan will suffer from it directly: the pricing policy will have an effect as the next increase of the cars prices.
According to the opinion of specialists the existing pother in dealer enterprises of car industry directly connected with population’s distrust to the financial system of the country. In all civilized countries the citizen who has some savings deposits them with the bank and earns the interest. But in Uzbekistan against the background of incomprehensible bank system, lack of confidence in governmental and commercial bank, the purchasing of cars became the profitable capital investment.
It is notable that the car market of Uzbekistan is unique. Uzbekistan is a unique place where old car may be more expensive than new one. So, having bought any model of General Motors Uzbekistan cars at automobile sales centre, after a year you can sale it in a specialized market for 10-15% as much than at automobile sales centre.
Another factor that causes indignation of the population is the selling the cars for foreign currency. It is impossible to get foreign currency at the exchange offices. People who want to buy car must exchange the foreign currency in the “black markets”. But it is a criminal offence.
The reason of the establishment of such kind of cars purchasing system was the deep-rooted corrupted system in financial policy, when the conversion of currency is realized for big “kickback” that comes up to 40-45% from the amount sometimes. It is unnecessary to remind that Rustam Azimov controls the conversion of currency also.
In spite of sizeable currency earnings from cars export the Ministry of Finance is unable to provide timely conversion of Uzbek sum for domestic manufacturers. If in early 2000 the demand of General Motors Uzbekistan in conversion of currency was US$ 300-400 million (this period they were producing about 30 000 cars a year), now they are producing more than 240 000 cars a year and this rate increased up to US $ 900 000. Meanwhile the amount of the conversion did not change.
The crediting for vehicles is also canceled and it does not permit middle class people to hope that they can buy a car some day. However, crediting, a main tool of banks’ financial policy, does not exist in Uzbekistan actually. The limitations and requirements to receive credits are very tough, making it impossible to get loan in banks. According to the opinion of Rustam Azimov thereby it eliminates the bank risk. However, the financial system is deficient without reasonable risks even in crediting, and Uzbekistan has been demonstrating it for a long time. According to the specialists’ opinion it is connected with an extremely incompetent monetary policy led by Rustam Azimov.
Anatoliy Voloshin
