AvtoVAZ, Asia Avto Form Kazakhstan Venture

VIENNA – Russian auto maker AvtoVAZ, Kazakh assembler Asia Avto and state-owned Kazakh company SPK Ertis form a strategic partnership.

Construction is to start in 2012 on a $514 million manufacturing plant including welding, paint and assembly shops in Eastern Kazakhstan. The partners also plan to make some vehicle parts in the region.

Chevrolet Captiva assembled at existing Asia Avto plant.

Production is set to launch in 2015 with annual output of 90,000 units, increasing to 120,000 by 2017.

Vehicles made at the new facility will be sold in Kazakhstan and in Russian regions including Siberia and the Far East as well as Central Asian and Caucasus states.

The project is supported by the Kazakh government and is one of several industrial development programs in the country. The partners expect the JV will create 12,000 new jobs.

“After it achieves the designed capacity, the project will be the largest in Kazakhstan’s mechanical engineering industry,” Anatoly Balushkin, chairman of the board of directors of Asia Avto’s parent company Bipek Avto, says in a statement.

AvtoVAZ in 2008 signed an agreement to buy a 25% share of Asia Avto. Plans at the time called for assembly of up to 120,000 units annually in Kazakhstan, but the agreement has not been realized.

Currently, Asia Avto assembles Chevrolet Aveo, Captiva, Cruze sedan, Epica and Lacetti hatchback and sedan models at its plant in Ustj-Kamenogorsk. The Kazakh auto maker also assembles Lada, Kia and Skoda vehicles.

Asia Avto built 5,309 vehicles this year through October, up 121.2% from like-2010.