KARACHI, Oct 12: An Indian auto giant is in touch with some local business houses with the aim to launch its vehicles in Pakistan.

The Indian company, Mahindra and Mahindra Limited (MML), attracted by the effective demand for automobiles, is engaged in discussions with four to five local business houses in a bid to strike a deal with a company for its vehicle production in Pakistan.

However, there is a glitch as everything depends on the green signal from the Pakistani government. It is still not clear if the government would allow the Indian company to take the plunge in over heated domestic automobile market, dominated by Japanese assemblers.

Besides Mahindra, many Indian auto assemblers have now set their eyes on the further improvement of regional and political relations as they are keen to see their vehicles plying on the roads of Pakistan.

"We are keeping us prepared. We are ready to enter into a joint venture with any Pakistani business house for the progressive assembly of their vehicles as soon as trade relations improve and both countries open their trade," Deputy General Manager, Overseas Operations, Automotive Sector, Mahindra and Mahindra Limited (MML), Sanjay Jadhav told Dawn in an interview before flying back to Mumbai on Tuesday after a few days stay here. However, he said that a lot depends on the response from the Pakistani government and future opening of trade relations between Pakistan and India.

The Mahindra executive was in Pakistan to get the feel of the market and to make direct contacts with some reputable business houses, which are already in the auto business or are planning to enter in the auto segment. Without quoting the name of Pakistani business houses, he said he had a fruitful discussion with some four to five well known companies.

"So far no memorandum of understanding (MoU) has been signed between Mahindra and any of the Pakistani company for the joint venture," he said hoping that chances are bright for a joint collaboration in auto sector in the light of growing trade and political relations. "We see bright prospects for Indian vehicles in Pakistan," he said.

It may be noted here that another Indian auto giant, Bajaj Auto, has decided to set up a manufacturing base in joint venture with Saigol family for bike, scooters and auto rickshaws.

Initially, Bajaj will have a technology deal where Saigol company will assemble completely knocked down kits exported from India. Later, as political relations improve, it will set up a manufacturing facility.

Sanjay Jadhav claimed that many Pakistani companies are also keen to enter into a joint venture and in constant touch with Mahindra who is looking forward to a long term manufacturing facility in Pakistan with a sophisticated dealership network.

"Mahindra may not like to enter into an agreement with Pakistani companies who are already in the auto business. The company is searching a well known group who enjoys a good industrial and market reputation," he said.

He said his company has already fastened its seatbelts to mark its entry in Pakistan as soon as trade between Pakistan and India gains momentum under the shadow of healthy growing political relations. He said that the company is aiming to take a plunge in Pakistan at a time when bilateral dialogues have started showing signs of resurgence.

He did not elaborate about any specific deadline of his company's entry in Pakistan, saying that still much depends on the green signal from the government of Pakistan. He dispelled the impression that Pakistani auto players will be the losers in case India and Pakistan open up their borders for free movement of goods.

"Opening of trade between two countries will give a good choice for the customers of both the countries. Chances of technology transfer will open in case trade liberalizes," Sanjay said.

He said that Pakistani auto industry is growing at a phenomenal rate. Vehicle demand is rising. New entrants will not create any negative impact on the business of existing companies.

Chances are also bright for a joint technological collaboration and technology transfer from India with the local vendor industry. He was of the view that Pakistani auto parts making industry has not developed as compared to India.

However, he said that some Pakistani auto parts makers have good manufacturing facility and quality of products. He said that local vendor industry will be able to get technical know-how to improve the quality of their products.

Without quoting the price of their products like Mahindra Bolero, Scropio, Maxx, Loadking Super and Bolero Invader, he claimed that the Indian products are price competitive and they excel in quality as compared to Pakistan.

The Mahindra official expressed his surprise over the late delivery period and high premiums being charged on locally produced cars in Pakistan. "There is no waiting period and no premiums on any cars being produced in India.

Car dealers offer gifts and prizes to prospective buyers on purchase of a car. A car is ready for hand over to the customers irrespective of the brands," Sanjay Jadhav said adding that the maximum delivery period is four weeks in case of Mahindra Scorpio, otherwise, there is no concept of late delivery and premium.

He said he had visited some authorized showrooms in Karachi and found the delivery period of cars ranging from three to nine months. He linked the increase in demand of cars in Pakistan to availability of attractive car financing packages, and said that manufacturers are trying to cope with the rising demand.

Mahindra's turnover was over $2 billion last year and the company produces sports utility vehicles, light commercial vehicles, three wheelers, utility vehicles. In utility vehicles, the company enjoys over 50pc market share in India while in LCV, it is No. 2 producer.

The Indian auto giant also exports its vehicles to Bangladesh, Sri Lanka, Nepal, Latin America and some African countries. India produces one million four wheeler vehicles a year while motorcycles production has touched to five million per annum.