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KARACHI: Millat Tractors Ltd (MTL) said on Thursday it can possibly join the consortium that is setting up a greenfield plant for the assembly and sale of Hyundai Motor Company (HMC) passenger cars and light commercial vehicles (LCVs) in the one-tonne range.

MTL informed the Pakistan Stock Exchange (PSX) on Thursday that its board of directors has authorised the company’s CEO and director to initiate discussions with the consortium.

Nishat Mills Ltd has recently signed a memorandum of understanding with HMC of South Korea and Sojitz Corporation of Japan for negotiating and establishing a framework to set up a greenfield project for the assembly of HMC passenger and one-tonne-range commercial vehicles.

Earlier, an analyst at Topline Securities estimated the project’s overall cost at around $150-200 million with a lead time of three years. He said Pakistan’s car penetration of 13 vehicles per 1,000 people (significantly lower than the regional average of 162) means there is a strong potential for automobile growth.

Lucky Group is also entering the auto market in partnership with Kia, another automaker from South Korea. Observers say that the new auto policy announced last year is yielding results and luring investors.

Published in Dawn February 17th, 2017

Comments (6) Closed

Alba Feb 17, 2017 08:37am

Hyundai makes very reliable automobiles. All the car parts are American made.

NKAli Feb 17, 2017 09:18am

Viva! Mubarak ho! The sooner Lucky, Nishat, Millat get the ball rolling on a fast track, the better for everyone. At least the Japanese cars will meet competition and the public will get a wide selection of cars. The prices will be competitive and quality cars will become available under supervision of Korean engineers. However, there is a big question..."Do we have the road and traffic management infrastructure to manage the influx of new technology. Not with our current selection procedure ofcops and bureaucrats. Salams

Ahsan Feb 17, 2017 09:47am

This is a good step indeed. The government must ensure that incentives are only given to new assemblers and not existing companies (especially Paksuzuki which has availed govt incentives for decades) otherwise new investment will be blocked.

New assemblers will not only create competition improving the technologically stagnant local market but will create thousands of new jobs and generate economic activity.

Maximum incentives must be extended to new entrants and they should be facilitated in every way possible by government departments. For the good of the country please stop preferring existing assemblers.

M.A.Naveed Choudhry, Advocate Feb 17, 2017 02:01pm

a good news on economic horizon of Pakistan. our new entrants should ensure that it is just not assembling of vehicles. in new millenium our auto industry must manufacture and export.

AHA Feb 17, 2017 05:25pm

You can't build a decent warehouse with $150-200 million

rustam Feb 18, 2017 03:17am

@AHA - You have doubt on an estimate of Topline Securities. That may be valid and Topline must defend its estimate. However, your presentation creates doubt on the project itself.