The so-called monopoly of the big three local automakers – Pak Suzuki, Honda Atlas and Toyota IMC – may face fierce competition from outside as the government has awarded incentive-based Greenfield Status to 15 new automobile companies.
According to a government-operated news agency, big names in the international automobile market are committed to invest over $1,169 million in Pakistan by availing either Greenfield Status – installation of independent and new automotive assembly and manufacturing facilities for production of cars of a make not already in Pakistan – or Brownfield Status – revival of existing but non-operational assembly or manufacturing facility independently or via joint ventures.
While 15 new automotive companies have availed Greenfield Investment Status, as many as two car companies will invest in the Pakistani automotive industry by reviving their units under Automotive Development Policy (ADP) 2016-21.
NEW AND OLD ENTRANTS:
Here’s the list of 15 companies that availed Greenfield Status under ADP: Al-Futtaim Automotive Pakistan (Pvt) Ltd, Sazgar Engineering Works Ltd, Kia Lucky Motors Pakistan Ltd, Foton, JW Auto Park (Pvt) Ltd, Regal Auto Mobile Industries (Pvt), United Motors (Pvt) Ltd, Master Motors Ltd, Pak China Motors (Pvt) Limited, Hyundai Nishat Motors (Pvt) Ltd, Khalid Mushtaq Motors (Pvt) Ltd, Topsun Motors and Engineering Services (Pvt) Ltd, Khalid and Khalid Holdings (Ptv) Ltd and Hanteng Motors Company (Pvt) Ltd.
Similarly, old auto companies are investing to revive their nonfunctional units. Dewan Farooque Motors and Ghandhara Nissan Ltd have availed Brownfield Status with their plans to receive an incentive from the government and possibly regain their market share.
It is worth noting that the ADP is an investor-friendly policy aimed at making Pakistan’s automotive industry competitive with the production of more locally-assembled/manufactured cars. If the policy goes as planned, consumers will have more choices and value for money. The incoming cars may raise the bar for present companies with better quality, safety and environmental standards.
We had earlier discussed that European auto manufacturers – German Volkswagen and French Renault – have been rather on the slower side with their investment, as compared to several other new entrants.
Renault has already acquired land at M-3 Industrial City in special economic zone of Faisalabad back in June 2018, to establish its assembly plant but since then, everything seems to be in a standstill position. There is a no different story in case of Volkswagen, who is yet to get the possession of the land for its assembly plant in Karachi.
NEW ENTRANTS’ PROGRESS:
Apart from European auto manufacturers, several other new players have begun their operations in Pakistan while some are in the process of building their assembly plants. These new auto players include the following along with their progress and plans in the auto sector of Pakistan.
Ghandhara Nissan already has a history in producing its popular Nissan Sunny in Pakistan. The brand is making its comeback in the local auto sector once again in collaboration with Ghandhara. The auto manufacturer will be introducing its Nissan Crossover at the local assembly line in 2020 right after its global launch.
Daehan Dewan Motor Company:
Daehan Dewan Motor Company has already launched its small commercial truck ‘Shehzore’ for local consumers in Pakistan. The company is also looking to introduce an SUV with the Korean SsangYong Motor Company (SYMC). It has already submitted its plans to the Ministry of Industries and Production regarding the launch of its SUV in 2019. However, it reports that Shehzore might take some additional time due to certain technicalities.
KIA Lucky Motors:
The Korean auto giant KIA, in collaboration with Lucky group, has recently launched its Grand Carnival along with K2700 pickup truck. However, the company is expected to start the assembling of their SUV from July 2019.
Hyundai Nishat Motors:
Hyundai Nishat has marked its entry in the local auto sector with the launch of its completely built units (CBUs) of Santa Fe SUV and Grand Starex van. Grand Starex is a competitor to the Grand Carnival introduced by KIA. Hyundai has added Ioniq to its lineup as well. As far as the local assembly plant of the company is concerned, it’s near to completion in Faisalabad. The company’s locally assembled cars will be available by the start of 2020.
United Motors is not a new face in the auto sector of Pakistan as it has been the second largest motorbike manufacturer in the country. But, the production of cars after attaining the Greenfield status, is certainly a new aspect for the motorbike manufacturer. The company has launched 800 cc United Bravo in the local market till now.
Regal Automobile Industries:
The company has collaborated with the Chinese DFSK Motors to roll out small commercial trucks in Pakistan. Regal Automobile Industries has its assembly plant located in the provincial capital of Punjab.
The joint venture of Master Motors and the Chinese auto manufacturer Changan is constructing its plant at Port Qasim which is near to completion. However, the company has already launched its SUV and jeep. It will also offer cars and heavy trucks which are set to make their way by the mid of 2019.
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