In Uzbekistan, a Chevy on every corner

Wed Sep 5, 2012 4:18pm EDT
 
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ALMATY (Reuters) - When a Tashkent resident flags down a private car for a $2 ride, chances are it will be a Chevrolet. Ninety-four percent of new cars sold in Uzbekistan last year were made by General Motors - the biggest share of any market served by the U.S. auto giant.

That General Motors should have a foothold in the reclusive former Soviet republic owes much to the technology and capital it brings to a country which, under veteran President Islam Karimov, has been the graveyard of many foreign ventures.

Landlocked Uzbekistan, a mainly Muslim country of 29 million in the heart of Central Asia, is ranked by rights bodies among the world's most repressive states. Hundreds died in 2005 during a bloody crackdown on an uprising in the Ferghana valley city of Andizhan.

The same, densely populated valley, where poverty fuels simmering discontent with Karimov's rule, is home to the GM plant where South Korean-trained workers file through electronic turnstiles to sparkling production lines beyond.

Robots tease metal sheets into shiny new Chevys and workers are trained to calmly respond to musical signals, in contrast to the noisy bustle, embroidered skull caps and brightly colored gowns on display in Asaka, the town outside the factory gates.

A former Communist party apparatchik, Karimov, now 74, has gambled heavily on building high-tech industries to try to cut dependence on the export of cotton, gold and other raw materials that were the backbone of Uzbek production in Soviet times.

"The Uzbek government's economic development model is essentially one of import substitution," said Lilit Gevorgyan, analyst at IHS Global Insight. "Uzbekistan lacks the capital and the new technologies. The joint venture with GM is a good example of how they can achieve this goal."

The compact Matiz and the Nexia sedan so ubiquitous in Tashkent, the country's capital, are a throwback to the 1990s, when South Korea's Daewoo Motor Co was Uzbekistan's joint venture partner at the plant.

Daewoo Motor Co split from its parent, Daewoo Group, in 2001 and later became part of General Motors. In its current incarnation, GM Uzbekistan is owned 25 percent by GM and 75 percent by state company UzAvtosanoat.   Continued...

 
Chevrolet cars are seen parked in front of the General Motors plant in Asaka August 29, 2012. Ninety-four percent of new cars sold in Uzbekistan last year were made by General Motors - the biggest share of any market served by the U.S. auto giant. REUTERS/Shamil Zhumatov