According to Automark source, Al-Futtaim Group which was an investment partner in the Renault project Pakistan decided to hold back the investment of the project. This may be keeping in view the current political and the economic situation of Pakistan. According to sources, Groupe Renault has cancelled the franchise of Al-Futtaim for Pakistan as they did not make any progress in setting up their assembly plant in Faisalabad.
Last year, Al-Futtaim Group got the Green Field status under the Automotive Development Police 2016-21 and started this project in partnership with Group Renault. Al-Futtaim is one of the biggest conglomerates of the United Arab Emirate and is present in many of the Middle Eastern countries. For setting up this automobile assembly plant, the company acquired 56 acres of land in Faisalabad, an industrial city situated in the province of Punjab. The joint venture had a plan to start vehicle’s production in Pakistan by 2020. Al-Futtaim Group announced to invest $230 million in Pakistan’s automobile sector through a joint venture (JV) with Groupe Renault.
Renault was expected to introduce latest vehicles and technology in Pakistan’s market in an attempt to break the monopoly of the three dominating Japanese assemblers – Suzuki, Toyota and Honda.
The joint venture was also expected to bring significant foreign direct investment to Pakistan and create many direct and indirect jobs, which would eventually improve living standards of people in the country.
According to Automark sources, initially Renault was planning to set up their plant at NIP Bin Qasim but due to non supportive attitude of NIP their project was delayed a lot and even after one year couldn’t get the possession of land.
Several vendors, and auto industry professionals had already moved to Faisalabad for this project but due to the cancellation of the project, employees are worried now about their jobs.
Some auto experts are of the view that Punjab Government gave them land with all facilities in Faisalabad, but they could not get the plant established. According to the sources Renault has backed off from this joint venture due to feasibility of this project which was submitted to them by Alfuttaim Group earlier at the start of the project and is said that the feasibility report submitted earlier is not workable due to recent changes in Automotive Industry due to Pak Rupee devaluation, Restrictions on Non filers, Fuel price hike and economic changes in Pakistan being few of them.
Earlier, Renault has been trying to enter in the Pakistani market for the last two years, they tried signing a deal with the two Pakistani companies, Dewan and Gandhara, but the negotiations didn’t go through.
Although there are no official announcement from Groupe Renault and Alfuttaim on this, but we will keep our readers and follower updated on this.
Established in the 1930s as a trading business, Al-Futtaim today is one of the most diversified and progressive, privately held regional businesses headquartered in Dubai, United Arab Emirates.
Structured into four operating divisions; automotive, financial services, real estate and retail; employing more than 42,000 employees across 25 countries in the Middle East, Asia and Africa, we partner with over 200 of the world’s most admired and innovative brands.
Al-Futtaim’s entrepreneurship and relentless customer focus enables the organisation to continue to grow and expand; responding to the changing needs of our customers within the societies in which we operate.
By upholding our values of respect, excellence, collaboration, integrity; Al-Futtaim continues to enrich the lives and aspirations of our customers each and every day. For more information visit: www.alfuttaim.com
by Aqsa Mirza