Many known automotive companies such as KIA, Volkswagen, Fiat & Renault planning to setup their production & assembling plants in Pakistan after successful deployment of CPEC. Recently news rose to surface that South Korean car maker Hyundai is planning to launch electric & hybrid vehicles for consumers in Pakistan. Important to mention that Hyundai has been doing its business before in Pakistan until some political issues pressured it to wind its business. Mian Mansha, who is one of the business tycoons of Pakistan and owner of Nishat group revealed the intentions of Korean carmaker of setting up its business in Pakistan.
According to him:
“The (South) Korean carmaker wants to first start the assembly of small cars that could compete with the existing (Japanese) assemblers already operating in this market. We are discussing with them… trying to convince them to also bring electric and hybrid cars. I see (that) the future is in electric cars. We could import these cars in the beginning and later also start assembling them locally.”
Investment of $120 Million:
With the entrance of new car makers in Pakistani market, competition will rose up ultimately gathering the attention of local & international investors. Mian Mansha has also decided to invest for this venture with a sum amount of $120 million. The land for setting up the automotive plant has already been acquired nearby Faisalabad.
With a major stake of Nishat Group reported figured as 42% and 18% of Millat tractors, it seems Mr.Mansha’s interest has grown a lot for doing business with Korean carmaker. A Japanese company has also a stake of 10% in this project & remaining will be put up in stock market.
Hyundai is one of many companies eyeing entry (or in this case a re-entry) into Pakistan following the 2016 Auto Industry Development Policy which offers incentives to foreign car companies.
Car-Makers Coming Soon to Pakistan:
Hyundai has already been in business before in Pakistan until it winded up due to unfavorable policies. However with the new updated and beneficial policies for imported car companies, KIA has also decided to jump in Pakistani market. KIA has already partnered up with Lucky Cement and car assembly plant is being set-up in Karachi.
Along with two South Korean carmakers KIA and Hyundai, a French automotive company Renault is also interested to spend $100 million with a plan to introduce their vehicles in Pakistan.
Automotive Industry in Pakistan:
As stated by an analyst:
“Hyundai and Kia have been to Pakistan before they had to wrap up business in the late 2000s after global recession hit the world and Pakistan, triggering economic slowdown. The positive thing about their comeback plans is that they are partnering with reputable local business groups with deep pockets. This shows their resolve to stay in this market for a long time.”
With a pleasant conclusion to above news, Pakistanis will be soon driving the cars manufactured according to international standards. Also there will be a monopoly break which has been setup by 3 major car companies in Pakistan from many years.