PSA Peugeot Citroën has signed a deal with Russian vehicle maker Allur Group to assemble vehicles in Kazakhstan from complete knockdown (CKD) kits. The first models are planned to roll off the line at Allur Group’s Saryarka AvtoProm plant in Kostanay in September 2016 and the first model will be the Peugeot 301.
Annual production volume is planned to hit around 12,000 vehicles in 2017, all for the local market, but PSA said this could increase to 17,000 in time. To support sales the French carmaker is considering an extension to its dealership network as production capacity expands.
The company has yet to confirm where the CKD kits are being produced and how they are being delivered to the Saryarka AvtoProm plant.
Allur Group’s subsidiary Argomash Holding is already producing Peugeot models at its semi-knockdown (SKD) plant in Kostanay, namely the Peugeot 301, 3008, 508 and Partner. These vehicles, along with the Peugeot 408 produced in Russia, are distributed through the Allur Group dealership network, which now covers Kazakhstan’s largest cities – Astana, Almaty, Karaganda and Kostanay.
“The full cycle assembly of Peugeot cars in Kazakhstan will allow PSA Peugeot Citroën to take full advantage of growth opportunities and become a benchmark player in the Kazakh market,” said PSA’s Christophe Bergerand, executive vice president and operational director for Eurasia. “We have already seen Peugeot’s sales success in Kazakhstan. This local production project will help improve the Group’s long-term profitability in Kazakhstan and the entire CIS region.”
The Kazakh market has experienced strong sales growth in the past few years, more than tripling from 45,000 units in 2011 to 166,000 units in 2013. Local demand is expected to reach 200,000 units in 2015 said PSA.
Earlier this year Toyota said it was launching CKD production of the Fortuner SUV in Kazakhstan following growing demand in the local market for the carmaker’s SUV brands. The company is also working as part of a joint venture project with Agromash Holding.
