Renault to produce cars in Pakistan

The Newspaper's Correspondent Published November 4, 2016

ISLAMABAD: Renault will start producing vehicles in Pakistan in 2018, the Board of Investment (BOI) announced on Thursday.

Miftah Ismail, the BOI chairman, told Dawn that the French car manufacturer had submitted its application to the government for the manufacture of vehicles. The application is now under process at the BOI and the Engineering Development Board.

This will be the first time that a European car manufacturer will set up a plant in Pakistan.

Mr Ismail said that Renault would initially make an investment of $100 million to produce 6,000 vehicles per shift at the plant set up by Ghandhara Nissan Motors in Karachi. A technical team of Renault visited the plant on Thursday. Renault intends to manufacture 16,000 vehicles in three shifts and to raise the production capacity to 50,000 in two phases.

According to the BOI chief, Renault will manufacture both SUVs and sedan cars.

Efforts will also be made to revive the manufacturing of Nissan vehicles in the same plant, he added.

Renault already has an alliance with Nissan since 1999, making it the longest running transnational partnership between two major manufacturers in the automotive industry. In 2013, Renault was the eleventh biggest automaker in the world by production volume.

Finance Minister Ishaq Dar led a Pakistan delegation to France in September to hold negotiations with leading French car manufacturers, Renault included..

The Economic Coordination Committee (ECC) had constituted a committee to review the auto policy and recommended fresh measures for expansion, investment and consumer protection. The committee was headed by Water and Power Minister Khawaja Muhammad Asif and included BOI Chairman Miftah Ismail.

The engineering side draft of the policy was prepared by the Engineering Development Board while the BOI chief took care of the financial aspect.

Published in Dawn, November 4th, 2016

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Hasan Siftain

Nov 04, 2016 09:21am

will it bring down the car prices ??

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Nov 04, 2016 01:22pm

@Hasan Siftain Probably not. But still there are alot of affordable Nissans out there. Exclusive Excises.

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Muhammad Arshad

Nov 04, 2016 01:40pm

Good News

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Umar Farooq

Nov 04, 2016 01:47pm

Good News, Carry on ........

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Podmari

Nov 04, 2016 01:47pm

Nissans is struggling in majority of the countries due to their manipulation with the pollution meter indicator which got caught recently. Even in India, Nissan cars are available at interest rates of 3% to 4% but still people are reluctant to buy. This is along with lots of other offers that they are giving. Their service is also quite costly and many times parts are not available easily. Wish you all the best. One question: 16000 unit per day 58,40,000 units per year. Is that a realistic figure? OR i missed something here

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Dr. Salaria, Aamir Ahmad

Nov 04, 2016 01:52pm

A non-starter by default and design. After all, who likes to buy an obsolete French car like Renault?

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Umreekan_Sundi

Nov 04, 2016 01:56pm

@Hasan Siftain There maybe a little impact initially because other companies will want to retain customers. The main benefit however will be that it will provide direct employment & business opportunities to thousands and will also boost investor confidence. I think government should also encourage Renault (in-fact can potentially invest as well) to manufacture cars for Afghan market and supply it from here

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analyses

Nov 04, 2016 02:09pm

@PODMARI: It's 16,000 units for the year (on the assumption of 3 shifts per day). 50,000 units is a bit too unrealistic given the annual aggregate demand in Pak, but if true, that would be a great blessing as the prices of all locally assembled cars (which are artificially very high) will go down.

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Starzan

Nov 04, 2016 02:10pm

Get this important business development endeavor done right. The national & international (exports) macroeconomics ramifications are very positive and enormously profitable! The Hell with the Toxic people, especially the jealous neighbors. So, don't stop till you get it done! Pronto! Presto, Presto! Do your very besto! Thanks & appreciation to French Renault, and Nissan! These will be mutually beneficial and good moneymaker endeavors! InshaAllah!

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Kaspar

Nov 04, 2016 02:13pm

I wonder why our government and manufacturers are obsessed with manufacturing cars instead of manufacturing buses for public transport?

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Gem Khan

Nov 04, 2016 02:21pm

Shocking news for Indian modi.

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ahmed

Nov 04, 2016 02:39pm

Discussion still at very early stages not confirmed yet

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Starzan

Nov 04, 2016 02:45pm

@Podmari. The manufacturing-assembly figures are for full capacity. 16,000 vehicles per month (scalable upwards) when assembly plant becomes fully functional. First to meet domestic market needs. Then ramp up capacity for exports to neighboring countries, European Union markets, North American, South American, African, Asian automotive markets, based on aggregation of Branded Global Units manufactured. All Branded assembly plants will have percentages of Global Markets Shares. That is, after meeting domestic market forecasts first. The parts & components "3D" manufacturing will be gradually phased-in, as proper standardized modular machine-tooling engineering infrastructures would have to be set-up. So, first things first. Then step-by-step scalability. Thanks. Smile & Have a nice day, everyone!

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Port kazim

Nov 04, 2016 02:49pm

Hopefully Renault will shift all Right-Hand Drive model productions to Pakistan

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Saigol

Nov 04, 2016 03:40pm

@Port kazim changing from left hand drive to right hand drive is not a big deal

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Sarai Alamgir

Nov 04, 2016 03:42pm

Another sign of an isolated Pakistan, Modi must be happy, well done Pak, hopefully this will bring the price of the cars down in the Pak Market.

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Salah Uddin Ahmed

Nov 04, 2016 03:51pm

it will be good for car market in Pakistan if Renault maintains the same prices as in India in Dollar terms as Japanese manufacturers are charging much higher now,it will help in bringing car prices down.

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Nov 04, 2016 03:52pm

The issue is with the local partner of Nissan...The Gandhara associates have many times introduced cars in Pakistan and have pulled back...the plant that they are talking about in Karachi was few years back assembling land rover jeeps...now it is back to square one

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Starzan

Nov 04, 2016 04:32pm

@Kaspar. The Busses are coming! The Busses are coming! Next! InshaAllah! One needs to have patience, which is a virtue. It is not like Fast Food Drive-Thru Window takeout.

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Tariq, Lahore

Nov 04, 2016 04:37pm

@Dr. Salaria, Aamir Ahmad - granted, Renault are not the best but IF the vehicles are 'manufactured' and not 'just assembled' that would be great regardless how old the models' be. Look at India they been manufacturing 'obsolete' Ambassadors cars since many decades. One example but the point is, see where they are now!

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ART KP

Nov 04, 2016 05:52pm

I hope RENAULT starts producing cars in Pakistan from 2017 not 2018.

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Ghaznavi

Nov 04, 2016 05:55pm

@Tariq, Lahore we must stop comparing ourselves with India a better comparision could be with Iran or Turkey

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kaleem

Nov 04, 2016 06:44pm

@Podmari 16000 per year

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Casper

Nov 04, 2016 08:23pm

Renault is a big name in auto, surely it will have all modern requisites like airbags,oxygen sensors,safety brake sensors,but it price could be a little higher than Japanese brands. While people are well acquainted with Japanese brands,Ranault have to work very hard, to get its share in Pak market. Incentives like easy leasings, and competitive prices, could help better marketing.All the best to Renault.

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Abdul Sheikh

Nov 04, 2016 10:54pm

@Podmari I have nissan Altima 2.5 Sedan since 2007 with 176000 miles, Always pass State Mandatory test and runs better than any in it's class. It's consumption and acceleration is better than toyota, I own both.

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Seedoo

Nov 05, 2016 02:38am

It's time Pakistan's government provided incentives for local design and manufacture of automobiles as opposed to just allowing foreign manufacturers to assemble cars using mostly imported parts and then packing their bags and leaving when going gets tough. What about the car, Proficient, that a Pakistani entrepreneur had designed during Musharraf's days? I am all for competition and foreign too, but Pakistan needs to make investments in its own local design and manufacturing too that can provide jobs to engineers and car designers that can bring engineering revolution in the country. Assembly of cars only requires blue collar low wage labor.

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Karamat Hussain

Nov 05, 2016 03:43am

@Dr. Salaria, Aamir Ahmad Where does it say in the article Renault will be building obsolete models??

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Usman

Nov 05, 2016 04:14pm

Govt should ask them to make Hybrids and electric cars only and not bring old technology. In UK we don't trust French automobile brands because of the quality.

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Pak Patriot

Nov 05, 2016 05:50pm

We are manufacturing J-17, submarines and Al-Khalid tanks, but NOT cars, why ??? Why are we STUCK INASSEMBLY PLANTS ??? WHY NOT DESIGN AND MANUFACTURE OUR OWN CARS ??? Let's hire retired, Hyundai car designers for our local design and production .

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Sukhera

Nov 06, 2016 10:56pm

The three Japanese auto assemblers have never transferred any technology to pakistan for the last 69 years. The local components used in the cars are minimal. The models being built in Pakistan are globally obsolete for many years with obsolete technology without any safety or quality controls. So what we need do at this stage is to demand the auto assemblers to transfer the technology and start making components in the country within a certain time frame . These models are expensive and obsolete and we can't compete or sell these models to other countries.If they don't agree , we should look at other options and find the auto maker who is willing to accede to our demands because we don't want to continue the same in the next 69 years. Its time to get tough with these greedy companies and remind them to change their strategy. India has never allowed this kind of practice for a long time. They are making all components locally and their cars sell at half what we are paying.

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