The impact of China’s expanding footprint in Uzbekistan’s automobile industry · Global Voices
Mukhammadsodik Donaev

Screenshot from EV's Queen YouTube channel showcasing the arrival of BYD in Uzbekistan as a car manufacturer.
China’s influence in the global automotive industry is growing rapidly, with Uzbekistan being one the latest countries to experience this trend that potentially marks one of the most prominent success stories of the Belt and Road Initiative.
China is making significant strides in becoming a dominant player in the global car export market. In 2022, it surpassed Germany to become the world’s second-largest car exporter by volume. The Chinese automaker BYD sold more electrified cars than Tesla, and saw a 307 percent increase in exports in 2022. The company also plans to establish factories overseas and expects to overtake Japan soon by shipping cars to Asia and Europe. One of its strategic markets is Uzbekistan, the first place where it will venture outside of China.
Chinese branded hybrid and electric cars are indeed now part of the landscape on Tashkent streets. Recently, the Uzbek state-owned company Uzavtosanoat announced a partnership with BYD Auto to manufacture cars locally, produce engines, electric motors, and batteries. With over 70 subsidiaries and a workforce of more than 27,000 employees, UzAuto stands as the largest automotive holding company in Central Asia.
The move towards localizing automobile production in Uzbekistan is part of a broader strategy to develop the country’s manufacturing sector. In 2022, Uzbekistan, the most populated country in Central Asia with about 35 million people, imported the largest volume of cars from China. As Beijing continues to expand its reach in the global automotive industry, partnerships like the one with Uzavtosanoat are likely to become more common.
Besides BYD, other Chinese car brands are also entering the Uzbekistan market, reflecting the growing interest in Chinese electric and hybrid cars among Uzbek consumers. Exeed plans to start producing cars in Uzbekistan in early 2023, while Chery has already entered the market with four car models. Additionally, a joint venture called “UzFoton” will be established in cooperation with the Chinese to produce medium-capacity trucks and minibuses. Another Chinese car brand, Oshan, will also be assembled and sold in Uzbekistan, with prices estimated to range from USD 13,000 to 30,000.
Moreover, other brands from Chinese electric car companies such as Jetour, Geely, Haval, Hongqi, XPeng, Changan, and Dongfeng have already opened their dealerships and sales offices in Uzbekistan. The main factors driving Uzbek consumers to opt for Chinese electric vehicles are their low cost, extended driving range, and ease of use.
China has adopted an effective strategy for the advancement of its automotive industry by shifting its focus from traditional cars to electric vehicles, rather than competing with European brands. As a result, Chinese companies gain a competitive edge and build closer ties with countries in emerging markets. This expansion also aligns with Beijing’s Belt and Road Initiative, which aims to strengthen economic ties between China and other countries along the ancient Silk Road.
The Uzbek automobile market has so far been dominated by various models of Chevrolets manufactured by UzAuto, the former General Motors Uzbekistan brand. Due to high customs and excise duties on foreign car imports, there is no real competition for the domestic manufacturer. Indeed, customs payments amount to around 120 percent of the initial car value. Such protectionism prevents healthy competition.
Domestically, UzAuto Motors JSC, the company that operates GM Uzbekistan, has been a major player in the car industry since 1994. It accounts for around 95 percent of the market share with an annual manufacturing capacity of approximately 280,000 cars. Even though it receives tax benefits and exemptions from the state — for instance, USD 177.6 million USD worth of tax benefits just in the first half of 2021 — UzAuto has failed to use these opportunities to benefit consumers effectively.
Indeed UzAuto’s automobiles are sold at significantly higher prices for Uzbek consumers compared to the export price, and the company has been accused of abusing its monopoly position by engaging in various practices, such as selling incomplete cars, delivering late, and imposing additional fees.  Despite numerous calls for change from various groups, there have been no significant changes in UzAuto’s affairs, and their lack of competition comes at the expense of consumers and other business entities in the country. Considering the situation in the market and growing population in Uzbekistan, UzAuto is not able to provide enough cars — and there is a strong demand for affordable cars.
UzAuto's decision to partner with Chinese automaker BYD to produce electric cars in Uzbekistan is thus a notable development in the country's automobile industry. There is also, however, concern that the electric car sector could become a new form of state monopoly. UzAuto's potential influence on the government may lead to higher taxes being imposed on imported electric cars, making it more challenging for other companies to compete in the future.
A prominent Uzbek blogger Umid Gafurov, who has more than 100,000 followers on various social media platforms, expressed his views about this deal with the following statements on his channel:
BYD машинасининг эгаси сифатида айтишим мумкин, сифат бўйича бу энг яхши компаниялардан бири. Ҳамкорлик учун айнан BYD танлангани яхши бўлибди.
Аммо, агар бу келишув бошқа электромобиллар импортига салбий таъсир қилса бу жуда ёмон. Биз монополиядан чарчадик.
As an owner of a BYD car, I can say that it is one of the best electric car companies in terms of quality and price. It was good that BYD was chosen for cooperation.
But if this deal negatively affects the import of other electric cars, that's too bad. We are tired of monopoly.
Uzbekistan’s capital city Tashkent is experiencing unprecedented rates of rapid urbanization, housing destruction and new construction. One of its consequences is also a marked worsening of its air quality, due mostly to automobile emission pollution. In its 2021 World Air Quality Report, the organization declared Tashkent the city 10th most affected by average annual concentration of PM2.5, or suspended particulate matter that can cause serious health damage.
The Uzbek authorities are taking this health hazard seriously. In December 2022, President Mirziyoyev signed a decree to launch a Plan of Action for Transitioning to a Green Economy and Ensuring Green Growth until 2030.
This adds on to previous measures: Starting in 2019, customs duty and excise tax on imported electric vehicles were abolished, and the fee for registering an electric car with traffic police was canceled in 2021. Now, only a 15 percent VAT on the total customs value is required to clear an electric car. Moreover, the government has made a resolution to provide state support for the production of electric vehicles in the country to reduce harmful emissions and support the development of a green economy.
Furthermore, the infrastructure for electric vehicles is set to expand significantly by 2025, with a minimum of 2,500 charging stations, and charging stations will be mandatory in all newly constructed shopping centers, entertainment and recreation venues, gas stations, hotels, and infrastructure facilities along highways starting from January 1, 2024.
The rapid expansion of Chinese cars exports and overseas production is one of the global success stories of the BRI. It achieves several goals. It helps to brand Chinese cars abroad, something that has long been a priority for Beijing. It also represents one of the main components of the BRI, namely the development of transportation and sustainable urban development, and reinforces the overall narrative that the BRI brings more affordable progress in hosting countries.
As the China Index, a global survey of China’s influence across countries and sectors, indicates, in Uzbekistan, China is predominantly active in the areas of technology and law enforcement. For Uzbek consumers, China’s BRI is seemingly bringing practical solutions in terms of access to car ownership but also tackling air pollution, and indirectly changing a culture of state monopolies and corruption.