New five-year auto policy, announced by the Ministry of Finance, Government of Pakistan in March 2016, seems to be very much eventful as far as the automobile industry in Pakistan is concerned. The government’s new auto policy is now focused on new entrants of the car makers offering benefits to them with little tax burden amid inviting competition amongst the existing assemblers in the automobile sector.
In the backdrop of the surge in passenger car sales that recently crossed 200,000 units for the first time in Pakistan, all of the country’s automakers are planning production increases to satisfy brisk domestic demand. In the wake of new auto policy, Pakistan market dominated by the Japanese automobile companies — Suzuki, Toyota and Honda, experienced real competition by the new players in the market for the first time. They are, however, actively preparing to compete with the future new arrivals that will be coming in the market. They are improving their models and making vast dynamic changes for the safety and comfort of the car buyers in Pakistan.
NEW COMPANIES SETTING UP CAR ASSEMBLY PLANTS
The federal government has officially granted permission to three new companies for setting up car assembly plants in Pakistan. These companies are set to bring $372 million investment in collaboration with local partners.
According to the official, the Ministry of Industry and Production (MIP) has approved licenses for United Motors Private Limited, Kia-Lucky Motors Pakistan Limited and Nishat Group under the Greenfield investment category. These companies will bring a total investment of $372 million. Kia-Lucky Motors will invest $190 million, the biggest sum, followed by Nishat Group with $164 million and United Motors at $18.1 million.
Earlier, nine companies were eager for setting up manufacturing units in Pakistan, however, only three of them have received the required approvals until now. United Motors is partnering with a Chinese manufacturer for a joint venture. Nishat Group is collaborating with South Korean Hyundai Company while Lucky Cement is going to set up a manufacturing plant with Kia Motors, also from South Korea.
There are another two Chinese companies in collaboration with United Motors and Regal Automobile Industries looking for investment under the Greenfield Investment category of the policy. Premier Systems Pakistan will invest $30 million for assembly/production of Volkswagen and Audi cars, possibly using Ghandhara Nissan Karachi plant.
A few of these investors will avail the concessions and facilities under the Brownfield Investment category. According to Nikkei Asia Review Web, new players are also flocking to this market of 200 million, lured by government incentives and the opportunity to tap a growing middle class. For now, there may be enough growth to go around, but these new faces which include the likes of Renault of France and Kia Motors of South Korea may threaten the dominance of Japanese makers.
KIA, RENAULT INTEREST
Kia and Renault have announced setting up assembly plants in Pakistan and Volkswagen, Fiat, Dacia and Nissan have expressed interest in entering the Pakistan automobile market. It is safe to assume that the possibility of new entrants can convince the existing auto-industry moguls to rethink their strategy.
French carmaker Renault is set to break into Pakistan’s rapidly growing car market with a manufacturing plant to open there by 2018. The car market in Pakistan is dominated by Suzuki, Toyota and Honda. They are accused of colluding to fix prices for lower-quality versions of their models.
Renault has decided to invest in Pakistan. They will start assembling cars in Pakistan by 2018. Renault confirmed the development on Twitter, describing an “exclusive negotiation) to develop brand in Pakistan, including a manufacturing plant”.
Renault has entered into exclusive negotiations with Ghandhara and Al Futtaim Groups to develop the Renault brand in Pakistan, including a manufacturing plant on the Ghandara site in Karachi.
The government announced in March that foreign carmakers seeking to enter the market could import machinery for their plants duty-free, in an attempt to boost competition and cut prices for local drivers. A delegation from Volkswagen visited the country but the German auto giant has not yet announced plans to build a local factory.
The following are the car launched recently by the foreign assemblers in the country which includes:
CARS BY SUZUKI
SUZUKI VITARA (2017 MODEL LAUNCHED IN LATE 2016): Launched in December 2016, Suzuki Vitara 2016-17 is a compact SUV and is now in its 4th generation the world over. The 2016-17 Suzuki Vitara is available in two models.
Vitara comes with a 1.6L naturally aspirated engine which delivers 118bhp at 6,000 revs. The hi-spec Vitara also comes equipped with a panoramic sunroof, which makes the drive even more pleasurable.
SUZUKI CIAZ: Quite similar to the new Honda City (2016-17), the first generation Suzuki Ciaz comes with a 1400CC engine supported by a decent range of features.
SUZUKI CELERIO: Marketed as the replacement of Suzuki Cultus, Celerio is an affordable 1,000CC engine manual car which offers 5-speed and resembles to Suzuki Swift in terms of the exterior.
CARS BY TOYOTA
Toyota’s new face lifted line-up of Corolla has been designed on the company’s new ‘Under Priority and Keen Look’ design language. The new Toyota Corolla provides a bolder facelift & athletic look, and offers a few mechanical upgrades including refined electric steering and tweaked suspension system.
The updated model comes in two variants of XLi (Basic and L.E), two variants of GLi (Manual and Automatic) and five variants of Altis.
TOYOTA FORTUNER: From body works to its interior, the vehicle is being marketed to be offering new and modern facelift. However, the engine will remain the same; 2.7L 2TR-FE inline-4, DOHC with VVT-I. A stand-out feature is that Toyota Fortuner is the only locally assembled SUV in Pakistan.
CARS BY HONDA
After the launch of the 10th generation Honda Civic last year, Honda Atlas has decided to take on Suzuki Vitara and Toyota Fortuner by the horns and is expected to formally announce the launch of Honda BR-V. The 1.5L engine BR-V is expected to come standard with 6 speed CVT-i transmission, 7 seats, and keyless entry feature and roof railings.
HONDA CITY: The 2017 model sixth Generation City, supposedly, launching in Pakistan, is Honda’s second model to incorporate the new ‘Exciting H’ design which was first seen on the third generation Honda Fit/Jazz that launched in September 2016.
CARS BY FAW
From the house of Al-Haj FAW Motors, the leading automotive supplier of Chinese brand FAW, an extension in the base of operations is quite imminent by the plans of stepping into the country’s Sedan market. Loaded with a 1600CC Volkswagen engine and an automatic transmission, FAW B50 can be a tough competition to Honda’s City and Suzuki’s Ciaz.
CARS BY AUDI
Offering the elegance of a coupé along with the versatility of an Avant, the Audi A5 Sportback is being described as the trimmed down Audi A7. Loaded with a 2.0-liter, turbocharged four-cylinder, this car is aimed to cater the medium-higher end German sedan consumers.