Kazakhstan to start making Russian cars on Monday

ALMATY, Dec 6, 2002; Reuters reported that Kazakhstan's first large-scale car plant will open on Monday and will assemble 10,000 cars in 2003 from parts supplied by Russian car maker AvtoVAZ, a creditor of the Kazakh company, Bipek-Avto, said on Friday.

Igor Novikov, regional director of Kazakhstan's largest bank, Kazkommertsbank, told Reuters by telephone from Ust-Kamenogorsk, the plant's location in eastern Kazakhstan, that the plant would produce AvtoVAZ Niva jeeps.

"In 2003 production of 10,000 automobiles is planned," he said, adding that the plant would have an eventual capacity of 30,000 cars per year.

The Niva is a popular and sturdy Soviet era jeep, but its production will be discontinued in Russia by 2005, as AvtoVAZ and U.S. giant General Motors have formed a joint venture to produce a new version, the Chevrolet-Niva.

General Motors has made it a condition of the Kazakh deal that Bipek-Avto does not export its Nivas to Russia. Instead, the company is looking to sell its cars in ex-Soviet Central Asia, Iran and, possibly, China.

Kazkommertsbank and another Kazakh bank, TuranAlem have given Bipek-Avto a syndicated loan of $40.6 million