Kazakhstan to Suspend Registration of Kyrgyz-Imported Cars: Impact on Both Markets

By Aziza Kapar kyzy December 9, 2024 15:48 Starting January 1, 2025, Kazakhstan will halt the initial registration of vehicles imported from Kyrgyzstan, citing the lack of integration between their electronic vehicle passport (E-PTS) systems. Economist.kg sought commentary on the potential impact from expert Iskender Sharsheev. In recent years, Kyrgyzstan has served as a “transit hub” for car imports into Kazakhstan thanks to lower customs duties and simplified import schemes, Sharsheev explained. This role has facilitated a steady flow of vehicles—both new and used—into the Kazakh market. “By restricting imports via Kyrgyzstan, Kazakhstan will disrupt this supply channel,” Sharsheev said. “The total number of available cars will decrease, driving up prices and limiting consumer choice.” As a result, Kazakhstani importers who once relied on Kyrgyzstan will need to find alternative routes, such as direct imports from other EAEU countries or through China’s Khorgos border. Yet these adjustments, Sharsheev noted, come with extra logistical and compliance costs, which are likely to be passed on to consumers. “Buyers in Kazakhstan will ultimately bear the brunt of these changes,” he added. Sharsheev attributed the new regulation to the absence of a fully integrated E-PTS system between Kyrgyzstan and Kazakhstan—an integration that Kazakhstan now deems essential for primary vehicle registration. If resolving this integration issue takes at least six months, the shortage of “Kyrgyz” cars could persist until mid-2025, potentially driving increased demand for alternatives, higher prices, and a narrower selection for Kazakhstani consumers. At the same time, Sharsheev pointed out that limiting informal supply lines may strengthen the position of official dealerships and formal import channels in Kazakhstan. Although this might bring about more stable, transparent market conditions in the long term, the immediate impact will likely be higher prices and fewer choices. “For Kyrgyzstan, this situation should serve as a strong incentive to expedite integration into the E-PTS system,” Sharsheev emphasized. “If integration is achieved swiftly, we may see a partial restoration of traditional trade routes. However, any prolonged delays could solidify the new market conditions, making them harder to reverse.” He also noted that this is not the first time an EAEU member has introduced measures curtailing re-export routes from Kyrgyzstan. “Such moves violate the spirit of EAEU treaties and reflect protectionist policies. But businesses have no choice but to adapt,” Sharsheev concluded.