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Kazakhstan's automotive market is experiencing a peculiar trend: new cars are sometimes being sold for less than their used counterparts. This price imbalance is beginning to affect the banking sector، particularly impacting the value of vehicles used as collateral for auto loans.

Market Imbalance Explained

The current situation sees new vehicles in dealerships priced lower than pre-owned ones. This phenomenon is largely driven by an oversupply in the market. Unlike a few years ago when car shortages and long waiting lists were common، dealerships are now competing fiercely for every customer. The influx of Chinese automotive brands has intensified this competition، introducing new models and putting downward pressure on prices.

Expert Analysis on Pricing

Automotive expert Roman Maslennikov describes the current phase as one of "oversupply." He notes that the price reduction is not just a temporary promotion but a sustained trend. For instance، Skoda vehicles in Kazakhstan are reportedly 30-40% cheaper than in Germany or Spain. Dealers are even offering discounts on 2026 models، signaling a significant shift in pricing strategy.

Used Car Market Disconnect

The used car market is struggling to keep pace with these new realities. Private sellers، holding onto previous price expectations، are listing vehicles at inflated prices. This often results in the cost of a used car becoming comparable to that of a brand-new one. Experts suggest that advertised prices for used cars frequently don't reflect the final sale price، with sellers leaving substantial room for negotiation. Actual sale prices can be significantly lower، sometimes by tens of percent، especially after private meetings.

Risks for Banks

This price disparity presents a tangible risk for financial institutions. When an auto loan is issued، the vehicle serves as collateral، and its value is assessed based on market prices. However، if a borrower defaults on their loan، the bank would need to sell the collateral. In the current market، the actual sale price of the vehicle could be considerably lower than initially anticipated، creating a shortfall.

In this scenario، new cars set the floor for market prices، automatically pulling down the value of used cars. If a used car's value drops below the outstanding loan amount after the loan is issued، the bank faces a potential loss. This risk is exacerbated by factors such as declining borrower incomes and increased inability to repay loans.

Loan Dependence and Chinese Influence

Up to 60% of car sales in Kazakhstan are financed through loans، making the stability of collateral crucial for the banking system. The growing influence of Chinese automakers continues to be a significant factor. Increased production and a saturated domestic market in China are pushing manufacturers to export more، including to Kazakhstan. Despite efforts to limit the export of popular models، both official and unofficial imports are on the rise.

Chinese manufacturers are reportedly focusing on design and performance، even hiring European specialists. They are also addressing reliability concerns، such as by introducing galvanized bodies. As consumers realize that Chinese cars can retain value effectively after three years، traditional brands like Toyota، whose sales are declining due to a conservative strategy and perceived technological lag، may be forced to significantly lower prices or exit the market.

Local Production and Loan Terms

In the mid-price segment (8-11 million tenge)، local production is becoming more prominent. The development of full-cycle plants، including welding and painting facilities، helps maintain accessible prices for the average consumer. Despite high base interest rates، auto lending remains a key driver of sales. Bank executives note that systemic risk is currently mitigated by relatively short loan terms، with the average repayment period for auto loans being around 2.5 years. This allows for quicker adaptation to price changes and reduces the likelihood of a critical gap accumulating between collateral value and outstanding debt.

However، as new cars become cheaper and the used car market adjusts، subtle pressure on collateral values will persist. This necessitates conservative risk assessment by banks and a focus on the actual value of a vehicle rather than advertised prices for buyers.