Kia, a popular South Korean automobile brand, may return to Russia thanks to Kazakhstan. Sorento and Sportage are expected to be the first models to re-enter the market. However, for this to happen, Russia must exempt Kazakhstan-assembled vehicles from the country’s disposal fee. Kazakh authorities have already made the corresponding request.
How Kazakhstan could help Kia return to Russia
A report on the implementation of the Ministry of Industry and Construction’s development plan for the 2023-2027 period, summarizing the results of 2024, includes a curious clause. Kazakhstan’s agency suggests that its Russian counterparts allocate quotas for Kazakhstan-manufactured cars, exempting them from the disposal fee. The Kia brand is cited as an example; however, these conditions could presumably also apply to other brands, including Hyundai, Chevrolet, JAC and Skoda.
In Kazakhstan, Kia vehicles are manufactured in Kostanay at the SaryarkaAvtoProm plant, owned by Allur. Previously, the company pledged to begin assembling updated crossover models, including the Sorento starting in 2025 and the Sportage in 2026. Some of these vehicles could potentially be exported to Russia in the future.
The South Korean manufacturer froze its production in Russia in 2022. Later, in the fall of 2023, various local media reported on the brand’s complete withdrawal.
Why this measure is essential
It is clear that lifting the disposal fee in Russia would be an important support measure for Kazakhstan’s automotive industry. Kostanay has consistently reported declines in production volumes, and the launch of new models, including those built for export, would help boost output. This could also be a win for Russian consumers, as cars imported from Kazakhstan would likely be more affordable than those from South Korea.
The current price of a Kia Sorento in Kazakhstan starts at 21.2 million tenge (approximately $42,432), while a Kia Sportage starts at 15.6 million tenge (around $31,223). The price range for the same models in Russia is higher, partly due to high customs duties and the disposal fee. For instance, a Kia Sportage imported from South Korea sells for 5 million rubles (around $59,174).
Will Kazakhstan-manufactured cars actually be freed from the Russian disposal fee?
Experts doubt whether Russian authorities will actually accept Kazakhstan’s proposal. Even the domestic car maker AvtoVAZ is subject to the disposal fee, despite the fact that facilities with a high local content rate receive certain benefits. An exemption for Kazakhstan’s cars would put local manufacturers at a disadvantage, as they are already struggling with sales.
The initiative may also face opposition from Kia. Large export volumes of its vehicles to Russia could pose serious sanctions risks. Notably, at the former Hyundai facility in Saint Petersburg, the Kia Rio and Kia Rio X are once again being assembled, though without official participation from South Korea.
