Toyota will launch complete knockdown (CKD) production of the Fortuner SUV in Kazakhstan over the next couple of months following growing demand in the local market for the carmaker’s SUV brands. The company is working as part of a joint venture project with local carmakers Agromash Holding and Saryarka Avto Prom.
According to the chairman of the Board of Agromash Holding, Alexey Sidorenko, production at Kostanay in northern Kazakhstan, will include the welding and painting of cars. The capacity of the assembly line is designed for up to 3,000 vehicles a year based on one shift.
Speaking in Kazakhstan president and CEO of Toyota Motor Europe, Didier Leroy, said the carmaker was seeing high demand for its vehicles, especially the SUV and the carmaker was beginning with Toyota Fortuner production.
"From June of 2014 we will start producing cars of Toyota Fortuner in Kostanay. We chose a local partner so our enterprise here could include welding, painting and assembly. Toyota will provide Saryarka Avto Prom with the technical guidance to ensure full production to the relevant standards.
The company is targeting a high level of localisation though a figure of 90% initially cited by local sources is not confirmed by Toyota.
Separate logistic schemesKazakhstan is about to join a Eurasian Economic Union with its neighbours Russia and Belarus, following the signing of a treaty on 29 May, which entails there are no customs duties between the countries. Despite this Toyota said that the new CKD plant will supply cars only to Kazakh market. This distinguishes it as most companies opening CKD production in the Russia, Belarus or Kazakhstan use the facility to target all three markets. Kazakhstan is already part of a customs union with Belarus and Russia (though this will be modified from January 2015).
Spokesperson Keysuke Kirimoto said that last year Toyota sold 8.9m vehicles globally last year and, while Kazakhstan accounted for just 13,400 units, it represented a sale growth of 45% compared with 2012 and those statistics showed that its brands were popular in Kazakhstan.
"Kazakhstan is a growing market and in this regard the corporation has made a strategic decision to locate production of the Toyota Fortuner here,” he said. “We consider Kazakhstan as an individual market. Toyota has its business strategy, which is independent from Russia and the Customs Union," adding that the carmaker sold 171,000 cars in Russia in 2013.
Kirmoto said that the Kazakhstan CKD plant will produce versions of the Fortuner specially designed for emerging markets and with a lower price but was keen to add that that would not mean a compromise on quality as it hand no intention of suffering again from the recall of millions of vehicles between 2009 and 2010 following the issues it had with accelerator pedals.
At the moment Toyota has no plans for assembly of other models but was not ruling out future diversity.
“If the demand for Toyota Fortuner from Kazakhstan assembly increases in the long term we will probably consider starting production of Toyota cars that are also in demand from consumers there including the Corolla, Camry and Land Cruiser Prado,” added Kirmoto.