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Ministry of Industry and Production in action – Three New Car Assembly Plants in Pakistan

Three New Companies to Set up Car Assembly Plants in Pakistan

In a recent development, the Government of Pakistan has allowed three companies to set up their car assembly plants in the country under the Green Field Investment as per the new auto policy 2016-2021. This is a massive initiative taken by the Ministry of Industry and Production as the entry of three Non-European car companies is expected to change the dynamics of the automotive industry of Pakistan which is currently ruled by three Japanese automotive giants including Toyota, Honda and Suzuki. The entry of the new car companies in Pakistan is also significant because the new companies will be working in collaboration with Pakistan Based Business Groups which is expected to open new avenues of growth for Pakistan’s automotive industry and boost the automotive sector significantly.
Companies that will set up their Assembly Plants in Pakistan
The Government has recently announced to dissolve the Engineering Development Board(EDB) for multiple reasons and the decision to allow three new companies to setup their assembly plants in the current scenario is a bold step taken by the Ministry of Industry and Production.
The three Non-European companies will work with the Pakistan-based business groups to establish their assembly plants and the details of these companies are following:

1. United Motors Pakistan will set an Assembly Plant in Pakistan in Collaboration with Chinese Partners.
2. The Nishat Group will tie up with the South Korea based car brand Hyundai and will launch passenger and 1-ton commercial vehicles in Pakistan.
3. The Lucky Cement Group will work with the South Korean Car Brand Kia. The group will also have the rights to sell and endorse parts and accessories of Kia Vehicles in Pakistan.

The total investment to be put by all three companies for establishing the assembly plants is $372 million. Kia and Lucky Cement Group will invest the maximum $190 million; Nishat Group will invest $164 million while the United Motors will invest $18.1 million.
Nature of the Agreement Signed by Three New Companies
According to sources, the Government of Pakistan announced a Category-A Greenfield Investment Status for United Motors, Nishat Group and Lucky Cement Group for assembly/manufacture of vehicles as per the exclusive agreement signed. A total of nine companies had submitted their documents and comprehensive business plans to EBD for consideration to set up manufacturing and assembly plants under the Green Field Investment, but only three companies got the approval.
In an exclusive discussion with Automark Magazine, Ibad Jamal of Hyundai Nishat Group confirmed that the group had got the approval from Government to set up their assembly plant in Pakistan under the Green Field Investment. He told Automark that it is a delightful occasion for the people of Pakistan as the assembly of new vehicles will open opportunities for growth of the automotive industry and will also offer more options to car buyers when they look to buy new vehicles in Pakistan. He also believed the opening of their new assembly plant will also provide ample employment opportunities which will be great for people associated with the automotive industry.
The CEO of United Motors, Mr. Sana Ullah also shared his views with Automark Magazine and confirmed that the company has amped up its efforts with their Chinese partners to launch the assembly plant for 1000cc vehicles in Pakistan. He said it’s an excellent platform provided by the Government of Pakistan to new companies and will play a significant role in taking the potential of Pakistan’s automotive industry to its optimal levels.
The Automark Team couldn’t contact the Kia-Lucky Group but the sources have confirmed that the Group has also received the confirmation from Government to launch their assembly plants in Pakistan.
Benefits of the Entry of three New Car Companies in Pakistan
The entry of three new companies in the automotive industry of Pakistan is a welcoming initiative of the Government of Pakistan and Ministry of Industry and Production. It depicts the progressive mindset of the Pakistan Government to grow the automotive industry of Pakistan and open doors for new car makers to establish their feet in the industry.
The entry of the three new companies in Pakistan’s automotive industry is expected to:

1. Enhance the competition between brands which will eventually benefit the customers.
2. Open new employment opportunities for people in Pakistan.
3. Improve the quality of vehicle maintenance services and influence the availability of vehicle parts in a positive way.
4. Boost the economy of Pakistan and grow the automotive sector exponentially.
5. Attract the attention of European car brands like Nissan, Renault and others to Invest in Pakistan’s automotive industry.

The prospects look good for the automotive industry of Pakistan and the growth seems imminent. All the three Pakistan-based business companies looking to establish their assembly plants in Pakistan are focused on contributing towards bringingforeign investments in the country’s automotive sector for its consistentgrowth.

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