ISLAMABAD:
South Korean carmaker Kia Motor Co will start assembling cars in Pakistan, according to a local partner that is planning to invest Rs12 billion to set up a plant and manufacture the Kia vehicles.
Karachi-listed Lucky Cement, which is part of the vast conglomerate Yunus Brothers Group, said in a statement on Thursday it planned to set up a new company to start “manufacturing, assembling” Kia vehicles.
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It was not clear how much capital Kia itself would invest in the venture.
Representatives for the South Korean company could not immediately be reached for comment.
Kia cars had been assembled by Pakistan in the past but disappointing sales led to a halt in manufacturing.
The new venture will also market and sell, besides import and export of, “all types of Kia vehicles, parts and accessories,” Lucky Cement told the Pakistan Stock Exchange in a statement.
Kia’s re-entry into Pakistan will boost government efforts to shake up the Japanese-dominated car market and loosen the grip of Toyota, Honda and Suzuki, who assemble cars in Pakistan with local partners.
Last month, French carmaker Renault agreed to invest in a new factory in Pakistan and official say they are talking to several other carmakers.
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The government believes increased competition should bring down exceptionally high car prices in Pakistan, and in March it introduced a new auto policy favouring new entrants into the market by offering generous import duties.
The incentives have angered existing market players, some of whom have said publicly they should get similar terms.
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Pakistan, with a population of nearly 200 million people, is a potentially huge market, but just 180,000 cars were sold in the 2014/2015 fiscal year. That compares with more than 2 million passenger vehicles a year in neighboring India.
Assembling cars is like almost importing a product loose. Pakistan needs manufacturing which companies avoid because of unstable environment in Pakistan.
@سے Shaam (Hanafi): I can see how Indians are upset at even the emergence of assembling by other countries’ car manufacturers. As we all know, over time, assembly leads to more local procurement and integration. The economy is improving which is why Pakistan is now ranked an emerging market. This shouldn’t frighten Indians like you.
@سے Shaam (Hanafi):
one step at a time bro, one step
Thats a STUPID car and never the first choice for Vehicle buyers
@سے Shaam (Hanafi): You Indians are welcome to keep negativity and jealousy to yourselves. Pakistan is getting investments from around the world. Hopefully we are expected to grow at 5.2% this year, our growth may go further very soon to 6-7%.
@سے Shaam (Hanafi):
This dude has so much time commenting on every news item on this site …… your family and friends must love having your negativity around!!!
Good news.
Government must give further incentives to new assemblers. Pakistan is being exploited enough at the hands of existing assemblers especially Paksuzuki which is selling cars based on 1980s technology globally retired models in Pakistan.