From early 90’s till 2015, automobile industry of Pakistan was in the state of Neurasthenia “Three Bigs” were controlling the market and industry. Previous Government of PML (N) headed by Nawaz Sharif introduced first ever long term auto policy for five years in 2016. This policy usually referred as new auto policy 2016-21.
The introduction of this policy has changed the horizon of automobile industry and market in Pakistan. The salient features of this policy were to create highly competitive environment, minimize costs, technological improvements satisfy all stakeholders including automobile users, create balance between tariff growths and curb the monopolistic environment which was artificially created by existing players.
Last but the most important is to attract the new investors. There are two categories of new investment as per this policy. First one is “Category A” named as the Greenfield Investment. This category calls for the installations of new automotive facilities by an investor for the production of automobiles those are not being assembled or manufactured in Pakistan.
Second one is the “Category B” named as the brown field investment. This category calls for revitalizing existing assembly and / or manufacturing facilities i.e. either not operational or closed since and before July 01, 2013 and the make is not being produced in Pakistan since then. Furthermore policy allowed the duty free import of plant and machinery to set up an assembly and manufacturing unit. The new investor shall also be permitted to import 100 Units of vehicle in CBU condition on 50% less duty for test marketing.
Fortunately a good response was received from the new investors and many companies approached to BOI / EDB for setting up new automobile plants in Greenfield category these investors were ready to set up vehicle plants of different origins which includes
KOREA,CHINA, MALAYSIA, GERMANY and FRANCE
Up till now following brands have shown interest and most of them already started production and marketing of their products in Pakistan.
1-KOREA
A – HYUNDAI–Hyundai Nishat Motor (Pvt) Limited.
B – LMC previously KIA– Lucky Motor Corporation
2-CHINA
A-UNITED–United Auto Industries
B-PRINCE / DFSK–Regal Automobiles Industries Ltd.
C-FORLAND–Foton Jw Auto Park (Private) Limited.
D-MG–MG JW Automobiles Pakistan Pvt Ltd.
E-CHANGAN–Changan Pakistan
F-MUSHTAQ–Khalid Mushtaq Motors
G-HAWAL/BJ40–Sazgar Engineering Ltd.
H-CHERRY–Ghandhara Nissan Ltd
I-ZOTYE–Rafiq Habib Private Ltd
J-PROTON–AlHaj Automotive
3-GERMANY
A-WOLKSWAGEN–Premier Motors Ltd
4-FRANCE
A-RENAULT–Al – Futtaim Automotive
B-PEUGEOT–Lucky Motor Corporation
Korean players proved to be more serious for entering in Pakistan market and they started their local production within two years. They are now competing the old “Big Three” specially in mid range SUV they are giving tuff time to the old players.
Two Chinese brand, assemblers, Regal and United are also started the CKD operations in the early stages. Regal introduced their 800CC Car, the CKD is from China and DFSK brand SUV and they are selling a handful volume all over Pakistan.
Upon start up their production capacity was limited and tentative deliveries of vehicles were stretched up to five months but they are very serious player and enhanced their production capacity on war footing basis hence now their
delivery time is 30 – 45 days.
However united remains contented selling their vehicles in Punjab only. JW Forland China is a commercial vehicle producer in China. They also started a joint venture with “Hire” fame Afridi Group and busy in production and
sale of Forland Brand commercial vehicles. Their assembly plant is in Lahore.
Khalid Mushtaq Motors who planned to market it vehicles under the brand name of “Mushtaq” under an agreement with an associate company of “Changan Group” China had established their plant in Nooriabad. However company is not able to market its product and looking for a potential buyer of its plant.
MG JW Automobiles Pakistan Pvt Ltd., is also an Afridi Group Company. They started marketing and sales of MG SUV with great pomp and show and recently The British High commissioner to Pakistan, Dr. Christian Turner visited the MG facility in Lahore. The visit was a festive and exciting event where the High Commissioner interacted with the company’s leadership, visited the state-of-the-art MG assembly plant, and got to test drive the all-electric Marvel R and HS PHEV.
However they started CBU imports in bulk by paying normal custom duty. In the meanwhile due to hike in dollar rupee exchange rate and change in custom duty rate, MG was forced to increase their imported CBU prices more than one time. However recently company announced that their CKD assembly plant is completed and they fully geared up to start CKD operations.
Changan is one of the big Chinese automotive brands. They joined hands with Master Group. Now they have introduced their different variants in Pakistan market.
Recently company officially introduced Changan Oshan X7 SUV as Pakistan’s first Euro-6 vehicle and this is Pakistan’s first global unveiling of a Right Hand Drive (RHD) vehicle, which is a significant milestone for the country’s auto industry, while Change will export this model of SUV’s to globally for the countries where Right Hand Drive (RHD) vehicles are using.
Sazgar Engineering Ltd is a market leader in three wheeler segment since last two decades. Now they established a four wheeler assembly plant in Lahore and had sign an agreement with Great Wall Motors China for the assembly of their “HAWAL” brand and with SAIC
Motors for BJ40 vehicles in Pakistan. Company already started local assembling of BJ40 while they will start local assembling of HAWAL SUV’s very soon IA.
Ghandhara Nissan Pakistan Cherry China has launched its SUV’s Cherry Tiggo 8 Pro recently. Cherry SUV’s are available for test drive and started local assembling at their assembly plant in Karachi.
Proton is a Malaysian brand and M/s. Alhaj Motors is their local partners they started booking of their two variants about one year back, one is PROTON X70 SUV and another is sedan car ‘SAGA’. Recently they have started CKD operation for the assembly of both variants’ locally.
Due to the Covid-19 lockdown in Malaysia and later some other domestic problems Proton Malaysia unable to provide CKD to Pakistan partner while assembly plant’s equipments and machinery also received very delayed.
According to recently press release by AlHaj Motors, “The restrictions imposed in Malaysia on business operating hours, social distancing, and interstate travel will be eased from April 1, 2022.
Al-Haj Automotive (Pvt.) Limited has already commenced the local assembly and deliveries of PROTON SAGA since November 2021. We would like to inform our customers that the supplies from Malaysia will be streamlined starting April 2022, enabling us to enhance the production of locally assembled SAGA and start mass production of PROTON X70.
Al-Haj Automotive (Pvt.) Limited has been assembling and ‘delivering’ Proton Saga locally since November 2021. The delivery schedules of locally assembled PROTON X70 will be informed to our PROTON dealers by next week. PROTON customers are requested to contact their respective dealerships for the delivery schedule of PROTON X70 starting next week.
Premier Motors Ltd of Pakistan is the local partner of the German Auto Giant Volkswagen Group. They are establishing car assembly plant in Hub industrial area of Baluchistan. The construction is underway and hopefully be operational in mid 2023. Volkswagen Group is planning to assemble “SKODA” and Volkswagen brand vehicles in this facility.
The French automaker Groupe Renault and Al-Futtaim sign agreement to assemble and distribute Renault vehicles
in Pakistan on 19th November, 2017.
On 20th June, 2018 they jointly started the construction of plant in Faisalabad. Before that Renault and Al-Futtaim was trying to join hands which was not materialized. However after Al-Futtaim – Renault joint venture Renault announced that the vehicle production will start by 2020. Unfortunately Pakistan has some issues with French Government regarding Islamofobia and group was also concern about the economic instability of the country. They became uncertain to start its operations. Resultantly they abandoned it operations in 2019.
Surprising in the same circumstances the second largest French automaker Peugeot a member of Group PSA entered in Pakistani arena and became the first European origin brand, assembled in Pakistan. Now they are exclusive partner of Lucky Motor Corporation Pakistan. Lucky Motor Corporation is a Younus Brothers Group Company which are already assembling Kia brand vehicles. They introduced first variant in Pakistan just in March this year which is a SUV.
The above mentioned all companies has got green field status. One company i.e Dewan Farooq Motors got brown field status. They signed a joint venture agreement with Kolao Group of Korea and started the production of Daehan Shehzore Dual – Wheel. They also announced that in near future they will start assembly of SUV TIVOLI of Sangyong brand. Unfortunately company shut down its production in Oct, 2019 and still closed.
There is no doubt auto policy 2016-21 provided a new bloodline to Pakistani auto industry and new entrants provides more choices and options to the end customer. But due to high inflation rate still customers are unable to get an entry
level car on affordable price tag.
This exclusive article has been written by Anwar Iqbal and published in Automark Magazine’s printed edition of April-2022