It’s only been a recent news when Nishat Group entered into an agreement with Hyundai Motor Company to establish a car assembly plant in Pakistan and caused ripples in the business industry. In a latest development, Nishat Group has been gearing forward to launch electric and hybrid passenger cars in Pakistan.
Statement From Nishat Group Chairman
While talking to Dawn, the Chairman of Nishat Group Mian Mansha said:
“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”
In addition, he also added:
“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”
In a reply to a question about the acquisition of the land for the car manufacturing plant, Mian Mansha answered:
“We already have acquired land for the plant”
It is significant to mention that the plant will be established in an industrial zone near Faisalabad. The land has already been acquired and Mian Mansha is investing $120 million in the project.
As far as the stake ratio in the new company is concerned, Nishat Group will have 42% while Millat Tractors and a Japanese company will have 18% and 10% stake respectively.
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Various Other Collaborations
Nishat Group is Pakistan’s third biggest business enterprise to have displayed a desire of establishing a car assembly plant in a contract agreement with an foreign automobile manufacturer. Under the 2016 Auto Industry Development Policy (AIDP), they have been offered lucrative incentives. The notion was to attract non-Japanese carmakers to the Pakistani market.
Younus Group’s (one of country’s biggest multinationals) Lucky Cement has collaborated with Kia (another Korean car manufacturer). Under the partnership, the group will assemble cars as well as commercial vehicles in Karachi.
In addition, French automaker Renault also plans to invest $100 million in Pakistan in order to bring its brand in the country. They are looking forward to invest in in the Ghandhara Nissan plant.
Speaking about the development, the CEO of Younus Group stated:
“We are working on the project. It will take some time to finalize all the details”
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Moving Ahead
While Pakistan’s automative market is setting new records of bullish, there are number of non-Japanese brands making their way to penetrate in the Pakistani market. As a result, Japanese brands are bracing themselves for a stiff competition in the future. Additionally, they are also planning to invest in fresh models and variants besides working on improving the quality. Furthermore, they also look to enhance passenger safety features, that too, in line with global norms.
According to a financial 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”
By the year 2025, it is anticipated that Pakistan’s market will grow to 0.5 million units.
