We have been talking about new players in the auto sector for almost two years—plans were made, agreements were signed, deals were called off. But it is only in the past few weeks that the picture has become slightly clearer. Though individual investment numbers still aren’t official, according to the government’s figures, the expected investments in the auto sector are well over $800 million. The new players are hoping to venture in passenger cars, commercial vehicles and luxury SUVs.
The size of the market is definitely expanding—we could very well be moving from 200,000 cars to at least 500,000 cars by 2020. Even if that doesn’t put us on the map, it makes having an automotive manufacturing industry worth the while.
The confirmed projects so far are Hyundai and Kia with Nishat and Lucky as local partners respectively. Between them, they will bring $250 million to the table.
The surprising revival comes from Dewan Farooqui Motors, after failing to launch a successful car over the past few decades; the company’s plans were approved by the Engineering Development Board (EDB). Dewan would be re-launching Shehzore pick-up trucks, while there are talks of other high-end vehicles with some Korean players. Some plans, like Audi’s assembly-only plant were not approved.
The much sought-after Renault has been a recurring name, but it isn’t clear whether the French are coming to Pakistan or not. Our friends over at Ghandhara Nissan entered into an agreement with Renault-Nissan alliance along with a UAE partner, but that deal did not work out. Renault then signed on with Al-Fattaim, a leading family-owned group in the UAE. They hope to begin car sales as soon as 2019.
Another emerging name is United Motors which has been approved for a Greenfield facility and plans to introduce smaller cars in the market—which would be a feat as no other player wants to go down that road. The company has already been selling motorcycles in Pakistan at volumes only second to Honda.
As Munir Bana, CEO Loads said in an interview with BR Research, existing players have a leg-up in the industry and new players will have to work fast to localise, establish vendors base and bring on dealers. It will be an uphill task and we will be watching.
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