Kazakhstan's auto industry is rapidly ramping up production, but the domestic market can absorb only half of the output, while external markets are shrinking. Experts warn of the risk of oversupply and a potential crisis for domestic manufacturers, reports infohub.kz.

Car production in Kazakhstan is growing actively. Earlier, Beknur Nesipbayev, General Director of Astana Motors, noted at a government briefing that investments in auto enterprises are aimed at renewing the country's aging vehicle fleet. However, as reported by inbusiness.kz, experts point to risks of market saturation.

Sales of new cars in 2025 reached 234,852 units, up 14.4% from 2024. Since 2018, sales have been growing, setting new records, but market capacity is limited. Production last year totaled 171,144 vehicles of all types, up 17.8% from 2024. In the first two quarters of 2026, 102,870 passenger cars were produced, a 36.4% increase compared to the same period last year (75,406 cars).

Despite production growth, the situation with absorbing volumes is challenging. Car exports have virtually dried up: the main importer, Russia, has become inaccessible. In 2023, official deliveries to Russia amounted to about 9,000 units, in 2024 – 8,000, and in 2025 – zero. The reason is the cancellation from April 1, 2024, by the Eurasian Economic Commission (EEC) of preferential conditions for cars cleared in EAEU countries. Commercial interest in supplies to Russia quickly faded.

For the same reason, exports to other EAEU countries also declined: in 2024, deliveries of passenger cars to Belarus fell 18-fold, and to Kyrgyzstan – by 27.5%.

The domestic market is also close to saturation: demand is estimated at 250,000 new cars per year, while production in 2025 already reached 234,000 units. Manufacturers claim they can produce 430,000 cars annually. The situation with auto loans is worsening: the auto loan portfolio grew by 42.2% in 2025 to 4 trillion tenge, and overdue debt approached 240 billion tenge.

The domestic auto industry mainly consists of small- and large-knockdown assembly of foreign cars, focused on earning high profits thanks to state financial assistance and protectionist measures. If government support is reduced (preferential taxes, subsidies, soft loans, provision of land plots and infrastructure), Kazakh companies could face serious difficulties.

Analysts note that subsidies reduce companies' interest in exports, as without additional state support measures they may become uncompetitive. With a sharp reduction in state aid, producers could be doomed to failure.