Nouveau Riche Car Buyers Step Up on the Steppes

The dusty streets of Central Asia, where horses and donkeys still amble, are the unlikely setting of a market-share battle between makers of luxury cars.

Central Asia and Kazakhstan encompass an ex-Soviet region of over 50 million people linked over vast expanses of steppe and desert by pot-holed roads.

Mercedes do not so much purr as lurch over these highways, but an increasing number of nouveau riche are buying luxury cars that cost hundreds of times the average annual wage.

“I am surprised, too, at how people can afford them, but they can,” said Tony Larsson, sales manager for Sweden’s Volvo Car International AB, speaking in Kazakhstan’s capital, Alma-Ata.

“We regard Kazakhstan as an extremely potential market.”

Volvo has sold about 500 cars since 1992 in Kazakhstan, a country of 17 million people which many predict may become a wealthy state within 10 years due to major oil exports.

Larsson said 2,000 or 3,000 foreign cars could be sold in Kazakhstan this year. In about five years’ time, around 5,000 to 6,000 top-end foreign cars may be sold annually.

Other car manufacturers appear to be similarly optimistic. Mercedes, Renault, Volkswagen, General Motors, Toyota, Daewoo and Skoda all rented space at Kazakhstan’s first motor show this summer.

Car salesmen say pent-up demand and high disposable incomes due to the low cost of food and utilities help boost demand.