Dewan Farooque Motors yesterday announced that it has entered a Technology License Agreement (TLA) with South Korean automobile giant Kia motors to assemble its vehicles in Pakistan. In a notification to Pakistan Stocks Exchange (PSX), Dewan Motors said: “By the grace of Almighty Allah, we inform you that Dewan Motors Limited has entered in TLA with Kia Corporation, Republic of Korea, for the production/assemble of vehicles.”
Expected Tussle or Not?
It is pertinent to mention that Kia is already producing its cars in Pakistan with its local partner, Lucky Motors. The joint collaboration focuses mainly on crossover SUV segments and launched cars, including Sportage, Sorento, and Stonic, with one hatchback Kia Picanto. It will indeed create interesting competition in the local market, as Kia will be here with two local partners.
But it is also important to note that Kia was not in an exclusive Joint Venture (JV) agreement, which is why Lucky Motors is also assembling French Peugeot cars in Pakistan. Hence, Lucky Motors is free to sign an agreement with another Pakistani company for production and assembly.
Dewan Farooque Motor’s Statement
Talking to PakWheels.com, Dewan Farooque Motor’s secretary Muhammad Hanif German confirmed the agreement. “Initially, we will produce and assemble light commercial vehicles of Kia Motors in Pakistan,” he said. Answering the question about a potential tussle with Kia, he said that we would not be entering the hatchback and crossover SUV segment for the time being.
Talking about production, German told us that Dewan has its own manufacturing plant with all the facilities, and Kia cars will be produced there. He expressed hope that the assembly would start in a year or so.
Kia Light Commercial Vehicles
Currently, Kia is producing two light commercial vehicles, K2700 and K2500. If Dewan Motors brings these vehicles to Pakistan, they will be competing with the likes of Hyundai Shehzore.
What do you think about this agreement between Dewan Farooque Motors and Kia corporation? Please share your thoughts with us in the comments section.
“But it is also important to note that Kia was not in an exclusive Joint Venture (JV) agreement, which is why Lucky Motors is also assembling French Peugeot cars in Pakistan”
My guess is from the beginning Kia wasn’t happy about that, Kia ia a far better brand than the french automaker, Kia is able to build premium car like Sorento and Carnival. Peugeot is a only a mid-range brand, with reliabilities and durabilities issues.
They was a time a was explaning to some guys a 2008 cannot cannibilize a Sportage.
Anyway i think we should considere, in a near future is possible for Kia to end completely his joint venture with the Lucky group.
The German confirmed the agreement, no wonder when we know Dewan is the official provider of BMW, and Kia Stinger was developped by Both Kia and BMW Motorsport.
I hope with this joint venture we will see Kia Telluride soon.