So, on March 21, 2021, we got Pakistan Domestic model, 6th generation Elantra and now everyone across the country knows about it.
Now, let’s go back a year ago [March 18 2020 ] when Hyundai launched the 7th generation Elantra in international market. Almost a year ago, we here in Pakistan knew that we would be getting a 6th generation Elantra, and Hyundai-Nishat was working on developing, and it was in the initial stage.
Plan of Elantra Launch in Pakistan:
After the Tucson launch mid-summer last year, the Elantra launch was planned for September 2020, But because of COVID-19, the timeline delayed and pushed to March 2021. The arrival of Elantra has given another option to buyers, and obviously, it will steal some sales from the competition.
I will not go into the nitty-gritty, Corolla, Civic or Elantra and which one is better or if Sportage / Tucson/ MG/ Proton / Glory is a better option. Its an extremely subjective matter, and there are a lot of variables, and every model has its pluses and minuses. I leave it to the potential buyers to decide after their detailed analysis of the options available in the market depending upon their likes, budget and other inputs.
There had been a lot of hue and cry about not launching the 7th generation Elantra. Yes, it’s sad, and obviously, everyone would like to see the newer generation instead of an obsolete model.
Why Didn’t We Get 7th Generation of Elantra?
BUT we should understand some facts. These are the same facts that were also applicable in the case of the launch of the older generation of Sorento. Unfortunately, when Hyundai-Nishat started developing a local model, Hyundai global was almost ready for the 7th generation.
Currently, 7th generation is assembled only at three plants, and all those are operated by Hyundai and feed the local market and export. The plants that are rolling out the 7th generation is in the USA, Korea and China. All these plants are mega factories where company manufactures hundreds and thousands, even million-plus units per year.
Case of Parent Company and Local Partner:
In contrast, Pakistan automobile works on concepts of CKD assembly lines, and until CKD kits are available, a company cannot generate the model locally. Additionally, the parent company/ principal have very little ownership of the local companies joint ventures. Our local industry has zero to negligible research and development, and there is no transfer of technology.
We rely on parts and kits, and until those are made available from the principals, we can’t have a new model. Car companies usually don’t offer CKDs right away. Even in the US, which is Elantra’s one of the largest market, the manufacturing of 7th Generation started just a few months ago.
Even in India, Hyundai India Motors is a fully owned subsidiary of Hyundai Korea. Still Hyundai has not launched 7th generation there, although that one is Hyundai’s 100% own plant with an extensive local R&D. The Indian market will not see the new 7th generation for another year or so. The same 6th generation Elantra is sold there, yes with more features and equipment (all PKDM always has less of features, safety but that is another discussion of its own)
Heavy Investment for Changes:
Additionally, it takes a lot of investment for a model change and as Hyundai Nishat was already establishing a plant with an assembly line for the 6th generation, switching to 7th is not easy both for operational reasons as well investment. The 7th generation is also an entirely new platform, so a switch from the 6th to 7th generation is NOT a plug and play procedure. A lot of groundwork is needed. So, if you see a 7th generation Elantra in the Middle East or Australia, its because it comes as an Import in those countries.
We should also know that the current Auto Policy 2016-2021, which attracted new investors/ car companies in Pakistan, is expiring by June 2021 so, any local planned model MUST be assembled before the expiration date or the company can’t avail the avaibale tax break on imports of parts , which is 5 years from the date of rolling out of the model.
This grace time is given to companies so, that they work and develop local supply chain and parts suppliers are ready to integrate in the assembly of the Pakistan Domestic Model. Local model will still use imported parts and to major extent BUT still some percentage will start becoming localized.
Henceforth, we have to live with the 6th generation for now, and personally, I don’t expect the 7th generation in the Pakistan market for at least the next 2 to 3 years. Nishat has invested in the 6th so that a certain level of ROI is required before making a switch, and it will take time.
For now, let’s welcome the 6th gen Elantra in Pakistan while we can at least enjoy the 7th on the internet.
BTW, the 7th generation Elantra recently won the North American Car Of The Year Award.
