Kazakh car dealers reject Russian buyers to comply with sanctions

ALMATY -- Kazakhs are welcoming the decision by automobile dealers to turn away Russian customers attempting to circumvent Western sanctions, cautioning that failure to comply could hurt Kazakhstan politically and economically.

Western countries imposed increasingly extensive sanctions against Russia in response to the Kremlin's invasion of Ukraine last year, making it difficult for domestic automakers to source parts and maintain supply chains.

Many international automobile brands also withdrew from the Russian market, including German, Japanese, Korean, American and French automakers.

With sales curtailed across Russia, the country has faced an acute shortage of new cars, and prices for existing stock have risen significantly.

Some shoppers have thought to go to neighbouring Kazakhstan to buy a car.

But while Kazakhstan has car brands that are not currently available in Russia --often at more reasonable prices -- Kazakh dealerships are refusing to sell to Russian citizens, Autonews.ru reported January 27.

These incidents came to light after an Autonews.ru correspondent travelled to Kazakhstan and pretended to be a buyer at car dealerships for several brands.

No cars for Russians

The reporter went undercover, exploring several dealerships to see whether they could purchase a vehicle in Kazakhstan.

A dealership for Korean brand Hyundai "flatly refused to sell a car based on a Russian passport", wrote Autonews.ru.

"What's more, the dealership's employee could not give the reason for such restrictions ... the seller did not even try to offer alternative car-buying options to Russian citizens."

When the journalist was denied a purchase at another Hyundai showroom, the manager cited "paperwork difficulties that mainly the customer himself would face".

A similar situation occurred at a dealership for Kia, another Korean brand.

A car purchase would be possible only with a residence permit or certificate of registration as a non-resident taxpayer of Kazakhstan, the manager told the journalist.

A dealership for Japanese automaker Toyota, which closed a plant in Russia and stopped selling its cars there, also refused to sell to Russian citizens.

"You can find a local friend who will register the car under his own name, but you would deal with the subsequent re-registration and other paperwork at your own risk and peril," a Toyota sales manager told the undercover journalist.

The covert Russian shopper similarly failed to buy cars at showrooms for Germany's Volkswagen, China's Chery and even Russia's Lada.

Employees at a dealership showcasing Lada models said it was impossible to buy a car using a Russian passport.

At a Volkswagen showroom, a salesperson cited the "difficult political situation in the world", in an apparent reference to Russia's war and the ensuing Western sanctions.

Autonews.ru did not indicate the Kazakh city in which the investigation took place, but it is most likely Astana, where Russians used to regularly purchase vehicles.

Anton Shaparin, vice president of the National Automobile Union (NAS) of Russia, told Autonews.ru that Kazakh dealers' decision to restrict car sales using Russian passports is "political".

"Dealers fear that, for example, automakers may stop supplying them with cars after deciding that [by allowing sales based on a Russian passport] the sellers are helping to circumvent sanctions imposed on Russia," Shaparin said.

Refusing to help Russia

The car dealers' decision to stop selling to Russian citizens is the right move, say observers.

Kazakhstan should behave like a civilised state, express its principled opposition to the war, and not support Russia, especially if the war is detrimental to its own interests, said Murat Rakhimberdiyev, former managing director of the Association of Automobile Business of Kazakhstan.

"Above all, of course, we must ensure that we strictly comply with the sanctions," he told Caravanserai.

Kazakstan has long indicated that it will not help Russia bypass Western restrictions.

Kazakh Foreign Minister Mukhtar Tileuberdi told Japanese television channel NHK at the end of December, that despite many years of close economic relations, Astana would not help Moscow bypass Western restrictions.

Timur Suleimenov, deputy head of the Presidential Administration of Kazakhstan, made similar comments during a trip to Brussels at the end of March last year.

"[The purpose of this visit] is to demonstrate to our European partners that Kazakhstan will not be a tool to circumvent US and EU sanctions against Russia. We will comply with the sanctions," he said in an interview at the time with EurActiv, a pan-European news outlet.

Russian companies that have used Kazakhstan and other Central Asian countries to continue exporting goods to Europe have drawn anger.

An investigation in January found that Russian and Belarusian timber exporters had begun sending their products to the EU under the guise of Kazakh and Kyrgyz timber with a falsified indication of the country of origin.

Many Kazakh's are calling to further curtail economic ties with Russia.

Daulet Akhmetov, a building materials supplier in Astana, noted that Russia has always been the main beneficiary of trade between the two countries, while Kazakhstan has had a trade deficit.

Kazakh citizens and companies should feel responsible and not help Russian businesses circumvent sanctions, said Almaty resident Sanzhar Doszhanov.

"Otherwise, it may not be just a particular company that feels the negative consequences but rather our entire economy," he said.