After a three year hiatus from the Kazakh market, Skoda, the Czech brand within the Volkswagen group, is resuming operations with local assembly. An agreement has been signed with the Allur automobile group to bring back production of the Karoq, Kodiaq and Kamiq crossovers alongside the Octavia passenger car at the Kostanay plant, which was formerly known as SaryArkaAvtoprom.
From the coming year, models assembled in Skoda’s Czech factories in Mlada Boleslav and Kvasiny will be distributed for the Kazakhstan market. The plan includes distribution through the Allur facility in Kostanay and via local dealer networks, as stated by Skoda in its announcement.
The cooperation envisions opening 15 Skoda dealership centers in major Kazakh cities and capturing a 5 percent share of the local market between 2024 and 2028. The projection also anticipates selling over 200 thousand cars annually in the next five years.
Skoda crossovers, liftbacks and station wagons have been familiar to consumers in Russia, where the brand was produced until 2022 at a facility in Nizhny Novgorod. Earlier reports on the region’s departure of the Volkswagen group were noted by media outlets at the time.
Skoda operated in Kazakhstan from 2005 to 2021, but withdrew due to the bankruptcy of its former distributor, a dealer group that previously handled Skoda under the Asian Cars banner in Ust-Kamenogorsk.
Considering the Russian Federation
The Kostanay plant has a production capacity of 125 thousand vehicles per year. Currently Skoda sales in Kazakhstan are limited to Kazakh citizens who present a taxpayer identification number, under a special arrangement with the Czech company. Deliveries to other countries are not yet part of the plan, according to Artur Miskaryan, director of a Kazakh automotive market monitoring agency.
Analysts offer varied viewpoints about market potential. One expert believes the brand could secure around 5 percent of the new car market in Kazakhstan, noting Skoda held roughly 1 percent in 2020. Another analyst contends that the strategy could involve exporting Skoda cars to Russia via parallel imports, arguing that a sole focus on Kazakhstan would lack a meaningful scale. He suggests that significant production volumes are a prerequisite for sustained investment in a non domestic operation, ideally reaching at least 30 thousand units annually.
Southbound integration is also discussed. Cars produced in Kazakhstan could be categorized as goods from the Eurasian Economic Union territory, potentially allowing shipments within the EAEU without customs duties. A similar approach has previously been used with Geely vehicles produced in a Belarus plant and then supplied to Russia. If a contract with Allur assigns ownership of supplied parts to Allur, the finished vehicles could be treated as produced within the EAEU, enabling easier cross-border handling and pricing advantages.
Even with favorable classifications, confirming the suitability of these vehicles for parallel import remains essential. Should the ministry authorize import under established schemes, these Skoda models would move into civil circulation in a third country, thereby falling under customs benefit provisions. Some observers note that Volkswagen may have found a path to assemble and export cars within EAEU territory while navigating sanctions on the European Union, which complicates direct imports from the EU. The legal landscape includes potential challenges from the EU and possible sanction exposure from other regions, with the North American market still a key area for the Volkswagen Group beyond China.
Industry insiders also consider the possibility of discreet supplies of Skoda cars to the Russian market. European and Czech restrictions are strict, but parallel imports and covert supply chains cannot be ruled out. The broader rationale is that producing cars in Kazakhstan could support sales to neighboring regions where growth is robust, particularly in Central Asia. Uzbekistan, which faces a car shortage, is frequently highlighted as a promising opportunity for expansion beyond Kazakhstan’s borders.