UzAuto Motors resumes car contracting, raises prices
04/03/2022 10:53
UzAuto Motors resumes car contracting, raises prices
04/03/2022 10:53
Tashkent, Uzbekistan (UzDaily.com) -- Throughout the period of the pandemic since March 2020, UzAuto Motors, having set high standards for itself, has fulfilled a plan to optimize production and reduce the impact of global problems on the production process and cost, the company’s press service notes.
During the "break" the company managed to stabilize the queue and from 3 March, the company officially announces the resumption of the issuance of contracts for Chevrolet Lacetti, Cobalt, Nexia and Spark cars.
Despite the global crisis in semiconductors and logistics, as well as the inflation of the national currency, the company went through the pandemic period with the best results among automakers in other countries: for two years, the cost of cars in the soum did not change, and even significantly cheaper in foreign currency (14%), the plant did not stop its activities and managed to save all jobs. And more than 300 factories, more than 100 trade, service and dealer enterprises and more than 200 thousand employees, including related industries, are involved in the activities of UzAuto Motors factories.
Moreover, despite the pandemic, in 2020 the company managed to increase the production of cars and produce 280,000 cars, and over the past three years, 786,000 cars have been produced, which shows an increase of 1.8 times compared to the previous three years. Also, since 2019, the company has been phasing out state preferences, as a result of which, last year alone, structural enterprises of UzAuto paid taxes on 5.36 trillion soums. soums, which is 3 times more than in 2018, and over the past three years, the amount amounted to 13.11 trillion. soums.
But the global logistics crisis has unsettled many manufacturers. If in 2019 the period of transportation of a container supply of components fluctuated in the range of 30-40 days, and the average cost of transporting one container from Northeast Asia to Uzbekistan was USUS$4,500 – 5,000, then the congestion of seaports in South Korea, China and Russia brought the delivery time sometimes up to 6 months and the cost of transporting one container to USUS$12,000-14,000.
In addition to unexpected global crises, the company’s situation was significantly complicated by the growth in the cost of raw materials, which, by all economic indicators, forced other automakers to increase prices by 20-40% over the past two years. Since 2020, prices for raw materials have increased significantly, in particular, steel has risen in price by 70%, copper rod by 64%, aluminum alloys by 76%, polymers by 60%.
All these factors, including the rise in the cost of raw materials and materials, increased logistics costs and other factors, affect the increase in the cost of cars by 1.8-3.1 thousand dollars, depending on the models.
This year was not limited to global crises associated with the pandemic and rising prices for raw materials. Recently, the aggravation of the geopolitical situation in Eurasia has been added to all world problems. Given that ensuring the production process requires the uninterrupted operation of the most complex supply chain, during a period of international turbulence, it is critical to keep enterprises running at all costs, not allowing the conveyor to stop. In addition, a possible transfer of supplies of raw materials and materials (steel, polymers, catalysts) from Russia to other regions could lead to additional costs in the amount of US$73.2 million (+29%), and the likelihood of changes in logistics routes from Russian railways to trans-Chinese may lead to additional costs in the amount of US$115.2 million (+45.5%). At the same time, UzAuto will make every effort to prevent these costs and minimize the impact of geopolitical factors on the company’s activities by prioritizing the interests of local consumers.
Based on the results of the market analysis, as well as taking into account the increase in the cost of raw materials, tariffs for utilities, inflation of the national currency and other factors, in accordance with the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated March 30, 2018 No. 249, UzAuto Motors is forced to update retail prices for individual models of produced cars.
Note that the above changes will have a direct impact on the company’s financial condition from June 2022. Because of the planned production of 275,000 vehicles in 2022 (including 60,000 units for export), 60% have already been purchased by local consumers at prices set in March 2020. From which it follows that the weighted average change in prices for 2022 will be 3.3%, while the global automotive market has risen in price by a much larger percentage and the retail prices of UzAuto Motors cars in export markets have been raised to 33% over the same time.
In addition, the company is reducing the percentage of prepayment for individuals for mass segment models from 85% to 50%, which will create additional convenience for consumers. For example, when buying a Chevrolet Cobalt A/T car at a cost of 125.6 million soums, the prepayment would be 106.7 million soums. According to the new conditions, the prepayment will be reduced to 62.8 million soums.
Also, the contract envisages a clause in case of delay in the delivery of the car, the buyer will be compensated.
The new conditions for the purchase of cars will be valid only for contracts concluded from the date indicated above.
In order to meet, first of all, the needs of the population, and not "businessmen", UzAuto, in agreement with the relevant competent authorities, prioritizes the issuance of cars under previously concluded agreements to customers who purchase cars for use, and not for resale. In case of detection of cases of conclusion of contracts for the purchase of cars for speculative purposes, the company reserves the right to increase the delivery time of the car by an additional 120 days. This will reduce the delivery time of cars to customers and satisfy the demand among the population.
The company assures that these measures are forced and due to the reaction to the general change in the situation on the market and in the world.
Recall that, in accordance with the resolution of the President of the Republic of Uzbekistan dated February 21, 2022 No. PP-137, a new procedure for the import of imported cars was approved, according to which customs rates were reduced by two or more times. So, until 21 February, customs duties for a car with an engine capacity of 1.4 liters and a cost of US$10,000 were US$5,800. According to the new rates, importers will pay US$2,900, and from 1 January 2023, US$2,340. This factor creates a competitive environment in the market of Uzbekistan, which will certainly have a positive impact on the country’s car market.
UzAuto Motors assures that it will continue to implement the optimization program, which will allow, as before, to be leaders among automakers in terms of pricing stability and not increase the cost of cars in line with inflation and other increases in the market.
New car prices:
Damas:
• DLX - 86,110,000 soums;
• Labo - 87,116,000 soums;
• VAN - 83,520,000 soums.
Spark:
• LT A/T Elegant Plus – 104,095,000 soums.
Nexia
• LTZ A/T Elegant Plus – 119,921,000 soums.
cobalt
• LTZ AT - 126,984,000 soums;
• LTZ А/Т Plus – 128,139,000 soums.
Lacetti:
• L-Comfort Plus - 129,457,000 soums;
• CDX А/Т Elegant Plus – 154,679,000 soums;
• GBO - 139,092,000 soums.
Malibu 2: 405,900,000 soums.
Tracker MY2022:
• JBUC LT AT Redline 1.0L - 264,000,000 soums;
• JBUC LT AT 1.0 - 255,200,000 soums.
Tracker-2:
• 1.0T LT AT FWD - 232,000,000 soums;
• RedLine 1.0T LT AT FWD - 240,000,000 soums.
Trailblazer:
• LTZ 6AT - 398,000,000 soums.
Equinox:
• AT 1LT FWD MH - 389,000,000 soums;
• AT 1LT FWD MH - 420,000,000 soums;
• AT 3LT FWD MH - 450,000,000 soums.
Traverse:
• Initial equipment - 408,009,595 soums without VAT, 469,211,000 soums with VAT.
• Premier AT MY22 -563 130,435 soums without VAT, 647,600,000 soums with VAT.
Tahoe
• 1st position – 519,728,198 soums without VAT, 597,687,000 soums with VAT;
• RST AT MY22 -823,913,043 UZS without VAT, 947,500,000 UZS with VAT.
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