European automakers go slow on investments

Updated March 26, 2019

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Renault announced acquisition of land at M-3 Industrial City in Special Economic Zone Faisalabad in June last year with the expected plant capacity of 50,000 units per annum.
Renault announced acquisition of land at M-3 Industrial City in Special Economic Zone Faisalabad in June last year with the expected plant capacity of 50,000 units per annum.

ISLAMABAD: Several Southeast Asian companies have started to roll out their vehicles, but slow pace of European manufacturers indicates their lacklustre interest in the Pakistani market.

The two European brands that had expressed interest to enter the Pakistani market under Auto Policy 2016-21 were Volkswagen AG of Germany and Renault of France. However, none of them have made any significant progress in this regard.

“Renault has acquired land in Faisalabad but there has been no progress to establish assembly plant, while Volkswagen still has to get the possession of land in Karachi as stated by their local partner,” said an official of the Ministry of Industries and Production (MoIP).

Under the policy, there are two categories for entrants; first for ‘greenfield investments’ relating to the installation of new automotive assembly and manufacturing facilities and the other for ‘brownfield investment’ to revive an existing assembly or manufacturing plant that was non-operational by July 1, 2013.

Ghandhara Nissan - that used to make Nissan Sunny car in Pakistan - is set to launch ‘Nissan Crossover’ globally in 2020 with the model expected to be introduced at local assembly line in 2020.

Daehan Dewan Motor Company is also in the process of reviving its small commercial truck ‘Shehzore’ and one vehicle in SUV category with SsangYong Motor Company (SYMC) of Korea.

SYMC has submitted an aggressive plan to MoIP that their SUVs will roll out in 2019 but there were certain technical hitches with Shehzore.

Meanwhile, United Motors - the country’s second largest bike manufacturer - has launched its first car in Pakistan under its greenfield investment. Similarly, Regal Automobile Industries has established assembly plant in Lahore in collaboration with DSFK Motors of China and it is rolling out small commercial trucks.

KIA Lucky Motors has also launched Grand Carnival and K2700 pickup trucks and their SUV assembling is expected from July this year. Master Motors, in joint venture with Chinese automaker Changan, has a plant at Port Qasim near completion with the company already having launched its jeep and SUV, while cars and heavy trucks are set to be online by June this year.

Another Chinese auto company Foton JW Auto Park too is rolling out LCVs from its plant in Lahore. Hyundai Nishat Motors’ plant in Faisalabad is close to completion and its locally assembled cars are expected to be available by January 2020. Sazgar Engineering Works is also set to launch cars, jeeps and SUVs by end of 2019.

Khalid Mushtaq Motors too is scheduled to roll out their Chinese model of small commercial trucks (by the end of this year.

The total number of companies in Category A has increased to 14 but Renault, Pak China Motors, Topsun Motors & Engineering Services and Khalid & Khalid Holding are falling behind their schedule.

Published in Dawn, March 26th, 2019