PM Abbasi breaks ground on Hyundai-Nishat vehicle assembly plant in Faisalabad

Published December 20, 2017
Prime Minister Shahid Khaqan Abbasi addresses the groundbreaking ceremony of Hyunday Nishat assmebly plant in Faisalabad. —DawnNews
Prime Minister Shahid Khaqan Abbasi addresses the groundbreaking ceremony of Hyunday Nishat assmebly plant in Faisalabad. —DawnNews

The groundbreaking ceremony of the Hyundai Nishat vehicle assembly plant at Faisalabad's M-3 Industrial City took place on Wednesday, with local production of vehicles expected to begin within two years.

Hyundai Nishat Motor Ltd signed an investment agreement with the Ministry of Industries and Production under the Automotive Development Policy 2016-21 earlier this week to set up a greenfield project to undertake assembly and sale of passenger and one-tonne commercial vehicles.

The plant is a joint venture between the Hyundai Motor Company and local textile firm Nishat Mills.

Prime Minister Shahid Khaqan Abbasi, while addressing the ceremony, said that despite Pakistan's instabilities and issues over the last few years, "the path to progress has continued. This is manifestation of the trust the investor has in Pakistan's policies."

Abbasi assured attendees that the country was ripe for investment and the investors were beginning to see it. "Pakistan is not what you see on CNN, this is the real Pakistan," he said. "Pakistan is a story of many successes," he added.

He thanked the Hyundai and Nishat groups for collaborating to invest in Pakistan.

Hyundai's return to Pakistan will boost the government's efforts to shake up the Japanese-dominated car market and loosen the grip of Toyota, Honda and Suzuki, who assemble cars in Pakistan with local partners.

Hyundai and South Korea's Kia Motor used to assemble cars in Pakistan until 2004 but withdrew after their local partner Dewan Farooque Motors Limited went bust.

Nishat Mills is a subsidiary of Nishat Group, a giant in the Pakistani banking, textiles, energy and cement sectors.

Last year, French carmaker Renault agreed to invest in a new factory in Pakistan and South Korean carmaker Kia Motor Co said it would start assembling cars in a joint venture with Karachi-listed Lucky Cement, part of the vast conglomerate Yunus Brothers Group.

The government believes increased competition should bring down exceptionally high car prices in Pakistan, and in March it introduced a new auto policy favouring new entrants into the market by offering generous import duties.

The incentives have angered existing market players, some of whom have said publicly they should get similar terms.

Pakistan, with a population of nearly 200 million people, is a potentially huge market, but just 180,000 cars were sold in the 2014/2015 fiscal year. That compares with more than 2 million passenger vehicles a year in neighbouring India.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Royal tantrum
Updated 20 Jul, 2024

Royal tantrum

The PML-N's confrontational stance and overt refusal to respect courts orders on arguably flimsy pretexts is a dangerous sign.
Bangladesh chaos
Updated 20 Jul, 2024

Bangladesh chaos

The unfortunate events playing out in Bangladesh should serve as a warning sign for other South Asian states.
Fitch’s estimate
20 Jul, 2024

Fitch’s estimate

FITCH seems to be more optimistic about Pakistan accelerating its economic growth rate to 3.2pc during this fiscal...
Misplaced priorities
Updated 19 Jul, 2024

Misplaced priorities

The government must call its APC at the earliest and invite all stakeholders to take part; this matter cannot be delayed further.
Oman terror attack
19 Jul, 2024

Oman terror attack

THE normally peaceful sultanate of Oman was shaken by sectarian terrorism on Monday when militants belonging to the...
Urban flooding
19 Jul, 2024

Urban flooding

THE provincial authorities have been taking precautionary measures, or so we have been told, to cope with emergency...