Toyota will start building its Fortuner medium-sized SUV in Kazakhstan in 2014 following a memorandum of understanding signed with the government this week. The vehicles will be assembled at a facility owned by local vehicle builder Saryarka AvtoProm, located in Kostanay in north of the country near the border with Russia. They will be built from complete-knockdown (CKD) kits shipped in from Toyota’s Ban Pho facility in Thailand. The company said it will produce around 3,000 units a year and Toyota Tsusho will be handling the shipment of knockdown kit parts. The vehicles are being built exclusively for the Kazak market.

Toyota has been importing and selling Toyota and Lexus vehicles in Kazakhstan through its sales and marketing subsidiary, Toyota Motor Kazakhstan (TMK), since 2008, but this is the first time it has worked with Saryarka AvtoProm. The Kazakh vehicle builder was established in 2010 and currently makes the Kyron as well as six other models for Ssangyong. It also assembles the Chance model for Ukranian vehicle maker ZAZ.

Toyota sold 8,200 vehicles in Kazakhstan in 2012 (Lexus model sales were just more than 1,000 units), nearly double what it sold in 2011 (4,400), and ranked joint second with Daewoo for market share at 9%. Lada is Kazakhstan's leading carmaker by sales, with more than 35,000 sold in 2012. It is targeting sales of 11,200 vehicles this year and nearly 24,000 by 2015 (again excluding Lexus figures).

The agreement with Toyota was signed at a ceremony held in the capital Astana this week and attended by Asset Issekeshev, Kazakhstan’s deputy prime minister and minister of Industry and New Technologies, and Toyota Motor’s senior managing officer, Didier Leroy, who is also president and CEO of Toyota Motor Europe.

“This project is an important milestone for Toyota and Kazakhstan, and is a product of our strong and cooperative relationship with the Kazakh government,” said Leroy. “We strongly believe that the potential for economic growth and a strong automobile market here is excellent.”

Later this month a fuller contract will be signed that Toyota said would define the roles of the participating companies. Toyota is to provide technical guidance and assistance to Saryarka AvtoProm for production, while its local subsidiary TMK will handle vehicle sales.

“Once this made-in-Kazakhstan true off-roader begins coming off the line here, we will be able to offer an extended model line-up, including ten imported Toyota models such as the Camry and the Land Cruiser, as well as seven Lexus models,” said TMK president Shingo Kato.

Last year Toyota began assembly of the Fortuner in Egypt with subcontractor Arab American Vehicle (AVV),  from SKD kits. Toyota is also aiming at an output of 3,000 vehicles a year there, with Toyota Motor Engineering Egypt SAE (TMEE) managing vehicle quality control, supply and demand management, as well as overseeing logistics services.

TMEE is a joint venture established in June 2011 by Toyota Motor, Toyota Tsusho and Toyota Egypt SAE, TMC's independent vehicle distributor in Egypt.