In the third quarter of this year, Uzbekistan's automotive market experienced growth, but it still falls short of the figures from 2023, according to the Institute for Macroeconomic and Regional Studies (IMRS).
From July to September, the number of vehicles that underwent state registration reached 352.8 thousand units, marking a 27.8% increase compared to the second quarter. However, this figure remains 19.9% lower than in the same period in 2023.
Among the factors influencing the automotive market, IMRS experts point to auto lending and available income: the correlation coefficient (the higher the number—from 0 to 1, the stronger the relationship) over the last three years has been 0.72 and 0.42, respectively.
Over the past nine months, banks have issued auto loans to the population totaling 12.79 trillion sums, which is 2.36 times less than the corresponding period in 2023. In the third quarter, the issuance of auto loans plummeted by more than three times compared to the same period last year.
If the lending rates remain at the levels of the last three years, IMRS forecasts that by the end of this year, about 115-118 thousand vehicles will be registered each month. In contrast, in the fourth quarter of 2023, more than 154 thousand purchase and sale transactions were concluded monthly.
Amid the significant decline in lending, automakers and dealers are taking measures to support demand. Some companies (GM Uzbekistan, BYD, and KIA) are offering discounts on certain models, while others (GM Uzbekistan, BYD, Cherry) are providing interest-free installment plans.
Why Auto Lending is Declining
In September 2023, the Central Bank tightened requirements for banks regarding the issuance of auto loans. The share of loans for vehicle purchases in the banks' loan portfolios should not exceed 25% due to the risks associated with loan concentration.
Since July 1, the Central Bank has increased the requirements for lending to the public. The regulator introduced a debt burden indicator, calculated as the ratio of average loan payments to the borrower's average monthly income.
This parameter is already used in micro-lending for individuals. The issuance of microloans has been limited to half of the borrower's income.
Starting July 1, the lending limit is set at 60%, and from 2025 it will be reduced to 50%.
Additionally, the Central Bank has tightened the requirements for issuing mortgage and auto loans to citizens. When assessing credit risk, an additional indicator—the "credit/collateral" ratio—will be taken into account.
In July, the CEO of the ADM Jizzakh car plant, Daniyar Davletiyarov, stated that the Central Bank has imposed "unofficial restrictions" on the issuance of auto loans. This year, he anticipates a 15% decline in vehicle sales, down to 350 thousand units.
Earlier, Spot reported that in October, sales of new domestic vehicles decreased.