Reporting "Asre Khodro", Being a favourable platform for major automakers, the country is now enlarging its car production and encourages foreign investments.
Azerbaijan has an access to major transportation routes, which enables investors to easily reach the markets they are aiming at. The roads leading from East to West and West to South that pass through Azerbaijan, substantial road, maritime and air transport infrastructure of the country, transform the country into strategic logistics hub of the region and make it an alluring destination for foreign investments.
Moreover, the interest of investors is also triggered by such factors, as a reputation of a reliable partner, stable political situation, construction of state-of-the-art port in the country, as well as favourable conditions created for investors.
The country imported only 3,454 units of cars in January-August 2016, while the figure is less by 17,693 units or some 83.67 percent, as compared to the index recorded last year. The significant drop in imports is mainly due to the switch to the Euro-4 ecological standard in 2014.
At present, only cars produced in the EU since 2005, in the U.S. since in 2004, in China and Japan since 2011, in Korea since 2006, and in Turkey since 2009 can be imported to the country.
Certain countries have already made investments in the development of automotive industry in Azerbaijan.
Iranian multinational giant automaker Iran Khodro is currently engaged in the implementation of automotive plant project in Azerbaijan. The project, which is implemented jointly with Azerbaijan’s AzEuroCar LLC will be located at Neftchala industrial district and cover an area of 10 hectares. The total cost of the plant is $15 million, while some 25 percent of the cost will be provided by the Iranian side.
Twenty percent of the produced cars will be exported. The cars produced at the plant will meet Euro 5 standard. Four Iranian car brands – Dena, Runna, Soren and Samand will be produced at the new plant, which will have a capacity of 10,000 cars a year. The car factory is expected to launch its first products as of May 2017.
Moreover, Bipek Avto – Group, the largest holding in the automobile market of Kazakhstan earlier expressed its interest in exploring the possibility of entering the market in Azerbaijan.
Also, the country is studying the possibility to build a GTL (Gas to Liquid) plant for the production of synthetic motor oils as the world’s leading car manufacturers recommend using synthetic oils and their aggregates in the automotive engines.
That can eliminate a shortage for such products, as the country is well placed to develop the GTL technology.
There are currently two operating plants for the production of motor vehicles in the country located in Nakhchivan and Ganja.
Nakhchivan Automobile Plant was put into operation on January 11, 2010, as a result of the Azerbaijani-Chinese cooperation in the sphere. The capacity of the plant is the production of 5,000 cars per year. The plant will soon launch the manufacture of new generation of cars in cooperation with Chinese auto producer Lifan.
Ganja Automotive Plant, which started its operation in 2004, is engaged in assembling Minsk tractors and trucks. The plant also produces tractor trailers, communal machinery, and snow removal equipment. The assembly of communal machinery is conducted as part of an agreement signed with the German Haller Company. Currently, the plant is engaged in the assembly of Belarus tractors and MAZ, KAMAZ and Ural vehicles.