Kazakhstan Ramps Up Vehicle Production As Manufacturing Localization Deepens

(MENAFN- Trend News Agency) BAKU, Azerbaijan, September 3. More than 96,000 vehicles were produced in Kazakhstan in January-July 2026, with passenger car production increasing by 37.2% year-on-year, buses by 27.6% and special-purpose vehicles by 45.1%, the country's government press service said.

"The qualitative transformation of the industrial model is reflected in the shift from large-unit assembly toward the production of higher-value-added goods. Mechanical engineering is becoming one of the examples of the transition to more complex production inside the country," the government said.

The mechanical engineering industry grew by 22% in the seven months compared to January-July 2025, producing goods worth 3.2 trillion tenge ($6.9 billion).

The government noted that the share of small-unit assembly reached 28.3%. The launch of the full-cycle KIA Qazaqstan plant in Kostanay and the multi-brand Astana Motors Manufacturing plant in Almaty, with a combined annual capacity of 90,000 vehicles, is helping form a broader industrial ecosystem. Production of tires, batteries, seats and multimedia systems has already been established around these enterprises.

In the agricultural sector, 10 domestic enterprises now cover 90% of Kazakhstan's demand for tractors and combine harvesters.

Railway engineering is also expanding, with production reaching 345 billion tenge ($746.2 million). Passenger wagon output increased by 10.7%, while locomotive production grew by 23.8%, and production of tank wagons has been launched. The share of local content at the SC Lokomotiv Kurastyru Zauyty plant in Astana reached 75%.

The expansion of machinery and railway production is taking place against the backdrop of a broader strengthening of Kazakhstan's manufacturing sector. Manufacturing output amounted to 18.8 trillion tenge ($40.7 billion) in January-July 2026, increasing by 9% year-on-year, while the sector's share of total output rose to 46.7%, exceeding mining's 45.8% for the first time.

Taken together, the figures indicate a broader shift in Kazakhstan's industrial structure, with localization extending beyond vehicle assembly into the production of components, agricultural machinery and railway equipment, Trend's analysis shows. As domestic supply chains deepen, the movement of components, raw materials and finished products is becoming an increasingly important part of the country's industrial development.

This trend also increases the importance of efficient logistics and reliable transport links for Kazakhstan's manufacturing sector, particularly as the country seeks to strengthen its role as a logistics hub connecting Europe and Asia.

Tatiana Rey-Bellet, IRU's TIR and Transit System Director, told Trend in an exclusive interview that Central Asia's transport corridors are undergoing a major transformation amid rising cargo flows and changing patterns of international trade, with their future development depending on a combination of infrastructure investment, digital solutions, international standards and private sector participation.

Rey-Bellet emphasized that the development of transport corridors requires not only investment in physical infrastructure but also improvements in border procedures and digital connectivity between countries.

"Despite massive investments into hard infrastructure, led by governments and multilateral development banks across the region, it remains a network where rapid hardware expansions are routinely undermined by soft connectivity inefficiencies," Rey-Bellet said.

The exchange rate used for the conversion is 462.31 tenge per $1 as of September 1, 2026.

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