May 31, 2018 / 3:36 PM / in a year

UPDATE 1-Uzbekistan to buy out GM stake in car factory - report

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TASHKENT, May 31 (Reuters) - Uzbekistan plans to buy GM’s remaining 10 percent stake in the U.S. carmaker’s plant in the country this year, Uzbek news website quoted state auto company chief Umidjan Salimov as saying on Thursday.

GM had previously held a 25 percent stake in the joint venture. Salimov did not say when and at what price his company, Uzavtosanoat, bought the 15 percent of shares and how much it would pay for the remainder.

The car factory in the central Asian nation’s eastern Andijan region was originally founded as a joint venture with South Korea’s Daewoo Motors in 1996. It was renamed GM Uzbekistan in 2008 following GM’s acquisition of Daewoo.

In 2017 the plant increased its output by more than 50 percent to about 135,000 vehicles, which are sold under the Chevrolet brand locally and under the Ravon brand outside the country, mainly in Russia. Its full capacity is 250,000 vehicles per year.

Uzbek President Shavkat Mirziyoyev criticised the factory this month for failing to create jobs despite enjoying tax and other benefits for decades. Mirziyoyev said the plant was “useless” because it had no competitors.

His remarks were the first official criticism of the factory which was traditionally regarded as one of the main achievements of the country since its independence from the Soviet Union.

The factory relies heavily on imported parts and had until last year sold cars domestically for foreign currency. Because of high demand, ordinary Uzbeks sometimes wait in queues for months in order to buy a vehicle. quoted Salimov as saying his company was in talks with other major carmakers including Volkswagen about setting up factories in the nation of 32 million. Uzbekistan is also discussing buying GM’s 70 percent stake in another joint venture which produces engines, he said. (Reporting by Mukhammadsharif Mamatkulov Writing by Olzhas Auyezov Editing by Vladimir Soldatkin and David Holmes)

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