Uzbekistan’s new vehicle import regulations risk strengthening its most notorious monopoly · Global Voices
Mukhammadsodik Donaev

Imported cars from China on their way to a dealership in Uzbekistan's capital Tashkent. Photo by the author. Used with permission.
At the beginning of April, over 400 businessmen voiced dissatisfaction with Uzbekistan's new regulations governing electric car imports. In the video addressed to President Shavkat Mirziyoyev, they requested the withdrawal of the changes that practically bar individuals from importing electric vehicles (EVs) for resale, allowing them to bring only one car per year into the country. The new regulations allow only authorized dealers to import and sell foreign cars.
Here is the video with the Uzbek businessmen's address to the president.
On March 18, it was revealed that the Chinese car producer BYD, which operates an expanding network of dealerships in the country, requested the government “to limit the indiscriminate import of electric vehicles” arguing its cars imported via non-official channels by individuals “do not meet local climatic and road conditions” and “do not have an official guarantee.” In response, the presidential decree tasked the relevant state bodies to develop proposals to accommodate BYD’s request by July 1, 2024.
These two developments raised fears that the current monopoly in the automobile industry will grow worse again. For more than 30 years, Uzbekistan’s domestic passenger car market has been dominated by the state-owned automaker UzAuto Motors, which has taken advantage of the high tariffs and tax breaks and loans from the state. The long-standing monopoly was partially challenged when the procedure requiring car imports through official dealers was abolished at the start of 2023. This allowed private importers to sell newly imported EVs, leading to an influx of competitively priced vehicles from China and other countries.
In 2023, the passenger car market in Uzbekistan comprised 456,347 units. UzAuto Motors was the major contributor with 369,999 cars. Another local automaker ADM Jizzakh accounted for 25,000 cars. Additionally, 8,948 BYD cars and 50,435 cars of other models were imported mostly from China.
In the first two months of 2024, a total of 17,553 cars were imported into Uzbekistan. The top three leading countries for these imports were China with 12,808 cars, Korea with 4,176, and the US with 455 units. It is noteworthy that imports of EVs in this period increased fourfold compared to the same period last year and reached 3,502 units. More than 99 percent of EVs came from China. This increase reflects the larger shift towards EVs among Uzbek consumers. The rapidly growing popularity of Chinese EVs in Uzbekistan is driven by their affordability, modern design, and efficiency.
Here is a YouTube video about the growing popularity of EVs in Uzbekistan.
The authorities have created a favorable legal and tax framework for EV importers and owners alike by removing customs fees and excise taxes and exempting EV owners from paying transport taxes. Environmental concerns also play a crucial role. As Uzbek cities, such as the capital Tashkent, grapple with deteriorating air quality, the clean energy aspect of EVs becomes increasingly attractive. Additionally, the periodic shortages of gas and the rising price of fuel have made EVs a more appealing and practical choice.
Starting from January 1, 2023, private importers received permission to import and sell cars. By the end of 2023, car imports from China had increased fivefold, reaching 58,000 units. Notably, approximately half of these imported passenger vehicles were EVs. Throughout the year, 61,372 certificates of conformity were issued for 62,748 imported vehicles, with 99 percent being issued to private importers.
This drastic change in the way cars were imported and sold upset the long-standing market rules, whereby only official dealers and local automakers imported and sold cars. Thus, at the end of 2023, the authorities started working on legal changes to limit the import of cars by individuals and hand importing and selling rights back to official dealers. It remains unclear whether the new restrictions targeting private entrepreneurs have already been enforced or will enter into force later in the year.
Various reasons were cited in favor of this decision. According to the Technical Regulatory Agency of Uzbekistan, private car importers have been taking advantage of the simplified importing procedures developed for individuals by avoiding the process of receiving a vehicle type approval document. Acquiring this document requires a long and costly certification process and remains mandatory for official dealers.
Additionally, private importers are reported to disregard issues related to the after-sales service, warranty period, and the supply of spare parts. Another stated reason is to prevent fraud. There were numerous reports of individuals and unlicensed dealers promising to import cars on behalf of customers, only to vanish with the funds. By limiting the ability to import vehicles to authorized dealers, the government hopes to clamp down on these fraudulent practices.
A major factor that puts the new restrictions under scrutiny and raises suspicions over attempts to stifle competition is the history of monopoly in Uzbekistan’s automobile industry. Since its establishment in the 1990s, Uzavtosanoat, the parent company of UzAuto Motors, has maintained a tight grip over the domestic market, producing 94 percent of all passenger cars in the country. Previously, Chevrolet vehicles, produced by UzAuto Motors, dominated the local market. However, they now face stiff competition from a variety of imported models, especially from EVs.
Here is a YouTube video about the history of UzAuto Motor's monopoly in Uzbekistan.
The new restrictions, as well as the possible upcoming ban on importing BYD cars by non official dealers, come in handy for Uzavtosanoat’s plans to expand into the production and import of EVs and hybrid cars in the near future. In 2022, BYD reached an agreement with Uzavtosanoat to set up a production facility in Uzbekistan.
In 2023, the Uzbek government and BYD signed an investment agreement and established a joint venture called BYD Uzbekistan Factory, with Uzavtosanoat claiming 60 percent of the shares and BYD getting 40 percent. The joint venture plans to produce 50,000 EVs and hybrid cars by the end of 2024.
If the government caves to BYD's demands, then the exclusive import rights will be granted to Uzavtosanoat in partnership with BYD, allowing only their joint venture to import and sell BYD cars in Uzbekistan.
Here is a YouTube video about consequences of the new car import regulations.
Public critics and industry experts view this as a monopolistic maneuver that restricts consumer choice and raises prices. Critics argue that the claim of vehicles not being adapted to local weather and road conditions is an excuse to limit competition. Blogger Umid Gafurov, a BYD car owner, dismisses the adaptation concerns, citing his satisfactory experience of owning the car imported by a non-dealer.
Likewise, economist Otabek Bakirov draws parallels with past monopolistic setups in Uzbek automotive history, suggesting that similar dynamics are at play with the establishment of this joint venture. He notes that this strategic move could adversely affect the sales of lower-priced EVs and ultimately limit the variety of affordable EV options available to Uzbek consumers.
It is crucial for regulatory measures to keep pace with industry growth to ensure that the expanding EV market can continue to evolve without undue restrictions. In addition, given the persistent increase in the import of Chinese cars over the years, this trend is expected to continue, influencing the market’s structure and dynamics.