Subject : Adam Motors likely to sign investment deal soon
Proposals received: Adam Motors likely to sign investment deal soon
By Farhan Sharif
KARACHI: Adam Motors Company Limited, manufacturers of the first locally designed and produced car in Pakistan, has received proposals for investment from both local and foreign investors, while a deal is in its advance stages and likely to be finalised within two to three months, sources in the company told Daily Times.
“The company received a very encouraging response, and a deal with any of the prospect investors would be finalised within two to three months or may be earlier,” said the source.
There has been a slowdown in Revo production by the end of last year, while the company has stopped the production of this particular product. However, he said the response for Revo was not bad but it was unfortunate that the market has changed aggressively in the previous few years that led the car to a margin crunch.
However, he said other products especially trucks and jeeps have received a very positive response from the market and has managed to acquire a noticeable market share.
The car company is also bringing a change in its marketing strategy with a required enhancement in design if required in accordance with market expectations. The reason behind the marketing review was the relatively poor response from the market compared to expectations.
He said that from April 2005 till now, the company has produced around 610 cars. These figures are far below the company’s expectations, as according to the actual plan in the last six months, the plant should have sold 1,500 units.
The company has expressed intention of finding some equity partners to help the company jump back on track with a fresh investment. However, the management is not willing to generate funds by using other options such as public offerings or with other corporate instruments.
With the production of Revo in 2005, Pakistan had joined the club of 16 countries, which produce their own cars. The engine and transmission were the only subassemblies, which have been imported from China. The starting deletion level was 67.5 percent, which was projected to increase 90 percent by Dec 2007