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Nissan set for second try at Pakistan auto market

Updated March 29, 2018

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KARACHI: Senior Vice President Nissan Motor Co Ltd Peyman Karger (centre) is signing a pact with GNL Chief Executive Officer Ahmed Kuli Khan Khattak  (right) to begin local production of Datsun models on Wednesday.
KARACHI: Senior Vice President Nissan Motor Co Ltd Peyman Karger (centre) is signing a pact with GNL Chief Executive Officer Ahmed Kuli Khan Khattak (right) to begin local production of Datsun models on Wednesday.

KARACHI: Nissan Motor Company Ltd is entering the Pakistani market for a second time, but at a press event on Wednesday, its Senior Vice President, Peyman Kargar, was unable to say which cars they will roll out first, or what segment of the market they are eyeing.

He also avoided any questions on price, saying only that they do not intend to compete on price but on quality.

He was present along with Ali Kuli Khan Khattak, Chairman Ghandhara Nissan Ltd (GNL), at a signing ceremony of the manufacturing and licencing agreement to begin local production of Nissan autos. Ghandhara will invest Rs4.5 billion over the next four years into the partnership.

GNL hopes to create up to 2,000 jobs through revival of its plant at Port Qasim, Karachi, which has a capacity of 6,000 cars per year. The company enjoys brownfield status under the Auto Development Policy 2016-21 and hopes to start production by end of next fiscal year.

“There’s a big population and the level of (car ownership) is low. It’s a good-sized market which is growing,” claimed Kargar, who heads Nissan’s operations in Africa, the Middle East and India. He expected the country’s annual sales to grow to 300,000 by 2022.

No word yet on which models will lead its entry into local market

“I think things were not ready at that time for Nissan Sunny. A company cannot come with one product,” Kargar said when asked about that experience.

Anticipating a robust car demand in future, he said by 2022-23 country’s car sales would swell to over 340,000 units from 203,000 in 2019-20.

GNL is upgrading its plant capacity up to 30,000 units per year by end of 2019 to cope up with huge demand. Car sales in the last four years have grown by 45 per cent.

Responding to Dawn’s question as to how Datsun will compete in prices with Pak Suzuki cars which have a 52pc market share, he said, “Price will not be our criteria. We want to clearly differentiate ourselves by the level of quality, attractiveness and durability to bring value for our models. We are not targeting to be cheap but we aim to rebuild the customers’ trust in our cars.”

He said Pakistani customers are tired of seeing the same old cars with limited choices. “We are confident that some existing customers will switch over to Datsun and new customers will also come to us as we are bringing in latest models instead of old models,” he added.

The official said he was not worried about competition as the company is already competing with car manufacturers in other countries.

“In Pakistan, we do not have all the carmakers. The car market will not be easier in future but it will be tougher when a country has all the assemblers offering tremendous choices for customers,” Mr Kargar said.

Asked about launching during an election year, he said politics will not hamper Nissan’s investment plans. “Nissan first looks at the markets, then competitors and government’s focus on business. When we started our plan we did not even see the politics in Pakistan,” he said.

Earlier addressing the launching ceremony, Mr Kargar said Datsun production would start with 20pc locally-produced parts. He said that Japanese engineers would be visiting soon to make assessments for procurement of parts from local vendors.

Reuters adds: Nissan’s bet on Datsun to succeed in Pakistan comes as increasing sales of the entry-level brand has been a bright spot in India, a highly competitive market where the automaker’s market share has eased to around 1.6pc due to sluggish demand for its marquee Sunny Sedan and its SUVs. In the 11 months to February, Nissan posted an 8pc fall in overall Indian vehicle sales.

Published in Dawn, March 29th, 2018