Azernews.Az

By Leman Mammadova

In recent years, automotive industry in Azerbaijan experiences positive changes. Azerbaijan is developing its own automobile manufacturing market by lauching new plants in this field to increase local production and decrease imports.

Construction of bus production plant in Hajigabul Industrial Quarter will start soon, Emin Akhundov, Chairman of the Board of Azermash Open Joint-Stock Company (OJSC), told Report.

He said that the construction of the facility will begin in the coming months.

“Negotiations are underway with the relevant structures related to the use of buses throughout the country. The cost of buses will be lower as it is domestic production. Basically, they will be exported to neighboring countries,” he noted.

Recently, new agreements were reached with Iranian companies Qartal - on the construction of a Scania bus factory in Azerbaijan (in the Hajigabul industrial quarter), and Etihad - on the construction of a car parts factory (in the Neftchala industrial park) together with Azermash.

The construction of bus production plant in Hajigabul Industrial Quarter will be completed by the end of 2020.

The plant is planning to produce 500 buses of both European and Asian countries at the initial stage. 100 people will be employed at the enterprise, which will operate on 5 hectares of land. The cost of the project is 11 million manat ($6.47 million).

In addition, spare parts of the car will be produced at Neftchala Industrial Zone. The cost of this project is 7 million manat ($4.12 million) and will allow about 70 people to be employed. The share of Azermash in the bus factory will be 25 percent and the share in the spare parts project will be 50 percent.

Automative sector is currently developing fast in Azerbaijan, as more plants engaged in the production of cars are being launched across the country.

About 1,000 cars were sold in 2018, which is 32.4 times more than in 2017. However, according to the results of only two months of 2019, 500 vehicles have already been sold. At the same time, if last year 40 percent fell on purchases by government agencies and 60 percent - by the population, now this ratio has changed. This year only 15 percent account for the state structure while 85 percent falls in the share of the population.

Such a sharp increase in the production of cars in the country was achieved by commissioning of a joint Azerbaijani-Iranian plant Khazar in the Neftchala industrial park on March 29, 2018, which costs $15 million (75 percent is Azermash’s share and 25 percent is Iran Khodro’s share). The plant has produced more than one thousand cars since the start of operations. Production of cars was organized by AzerMash together with the Iranian automobile company Iran Khodro Industrial Group (IKCO).

Recently, the groundbreaking ceremony of another plant - assembly plant for GAZ cars was held in Azerbaijan's Hajigabul industrial quarter, where a line of 12 types of Russian trucks of the GAZ Group will be assembled, scheduled for release in the second half of 2020. The estimated investments in the enterprise will be 14 million manats (over $ 8 million). The company will manufacture up to 1,000 commercial vehicles annually. Half of the cars produced will be sold in the domestic market of Azerbaijan, the rest will be exported to other countries.

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Leman Mammadova is AzerNews’ staff journalist, follow her on Twitter: @leman_888

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