GM makes stand in Uzbekistan

  • 11-Aug-2008 10:05 EDT

Although several automakers sell vehicles in Uzbekistan, General Motors is the only one with an assembly plant. Shown are workers  checking vehicle quality at the GM plant.

This Central Asia locale is not a global seaport, and it is one of only two countries in the world to be doubly landlocked. But Uzbekistan can boast of having a passenger-vehicle assembly plant.

Located north of Afghanistan and between Kazakhstan and Turkmenistan, Uzbekistan gained its independence in 1991. A year later, South Korea’s Daewoo and the Uzbekistan government signed an agreement for the joint construction of a vehicle plant in Asaka, about 350 km (220 mi) from the country’s capital of Tashkent.

Fast-forward to 2008 and General Motors becomes that plant’s joint venture partner with UzAvtoSanoat, an Uzbekistan government-owned holding company. UzAvtoSanoat holds the majority stake, while GM holds 25% plus one share with the option of increasing its ownership stake in the future. The new joint venture, General Motors Uzbekistan, is one of the recent action items to occur since GM acquired selected assets from the bankrupt Daewoo a few years ago.

GM Uzbekistan is viewed as a key cog in GM and Chevrolet’s continued growth in Central and Eastern Europe, according to GM Chairman and CEO Rick Wagoner. GM "has moved aggressively in recent years to establish a leadership position in the world’s fastest growing markets," he said. "We are confident that General Motors Uzbekistan will make a strong contribution to the growth and development of the Uzbekistan auto industry and economy."

According to Peter Gal, Public Relations Manager for New Markets - General Motors Southeast Europe, local joint-venture (JV) firms bring 338 items to the plant, while local firms supply 726 items. For instance, engines and transmissions are shipped to the Asaka plant from GM Daewoo in South Korea. Tires are shipped from Germany, steel from Russia, radiators from Kyrgyzstan, and glass from Serbia, while batteries, wheels, and trim parts come from local suppliers.

Three Chevrolet models—the Captiva SUV, the Epica large sedan, and the Tacuma multi-purpose vehicle—are currently assembled at the plant. Later this year, the Lacetti, a compact vehicle, joins the lineup at the 250,000-unit-capacity plant. Other vehicle models will join the assembly portfolio in coming years.

The plant operates under GM’s Global Manufacturing System, which focuses on high quality, productivity, employee commitment, and continuous process improvement. The Chairman of SC UzAvtoSanoat, U. Rozukulov, said having GM as a JV partner means "modern technology and training for our workforce of 4700, more employment opportunities, and more customer choice. The new joint venture gives us the opportunity to introduce high-quality products meeting international standards."

The plant’s vehicles will be sold through a network of 60-plus domestic dealerships, and select models will be exported to Russia and neighboring Commonwealth of Independent States. "The basic aim is to cover the local market requirements and utilize the possibilities," said Gal. Vehicle sales in 2007 exceeded 70,500 units, representing a 7.5% increase from the previous year.

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