GM Uzbekistan has suspended finished vehicle sales in Uzbekistan, after failing to carry through a price increase on the domestic market there. The move follows a similar suspension in Russia – its second biggest market after Uzbekistan – for more than two months on similar grounds.
Speaking at a press conference back in late July, Shavkat Umurzakov, chairman of the board of Uzavtosanoat, the main shareholder in the company, announced that GM Uzbekistan had scheduled an average 14% price increase for its vehicles on the domestic market – something he described as inevitable, due to the low utilisation rate of the Asaka assembly plant, the company’s main production facility.
Despite a design capacity of 290,000 finished vehicles a year, the plant currently assembles just 160,000 finished vehicles a year, Umurzakov admitted. This, he said, had put financial pressure on the company and led to the need for the price hike – something he apologised to the citizens of Uzbekistan for.
This provoked a backlash among Uzbekistan citizens, however, who were sharply critical of the move on social media, effectively forcing GM Uzbekistan postpone its price hike for an indefinite period.
In a statement released on August 13, Uzavtosanoat said that the plan to increase prices was “under thorough review by authorised persons and organisations, taking into account all possible positive and negative consequences”. Uzavtosanoat confirmed the price hike was still in the pipeline and said that until it was carried through, GM Uzbekistan would not be selling any further finished vehicles to customers in the country.
There is currently no indication of when finished vehicle sales will resume there.
A price revision issue was also cited by the company in a recent statement to Russia Gazette, the official publication of the Russian government, as one of the reasons for which GM Uzbekistan had suspended sales in Russia. GM Uzbekistan has not sold a single vehicle in the local market there since May, the Russian Association of European Business revealed earlier this month.
Earlier, GM Uzbekistan had suggested there was a shortage of finished vehicles for the Russian market and said that “some changes in the company’s operational model” had caused some disruption to its supply chain, according to the Russia Gazette. In May, the company promised sales would be resumed in June, but this has not happened yet.
The company has not said when exports to Russia might be resumed.
GM Uzbekistan was understood to be planning to assemble the Chevrolet Tracker in Uzbekistan by the end of 2018 and possibly start selling it under the Ravon brand in Russia. Plans for such exports have not been officially confirmed by the company yet, however.