Automobile: Two companies allowed to assemble vehicles in Pakistan

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By Muhammad Luqman

Dubai-based  Group and another local company  have been awarded NOCs under the category of ‘Greenfield Investment Status’ this week for assembling and distributing their vehicles in Pakistan, according to media reports.

Al-Futtaim Automotive Pakistan (Pvt) Limited that received its NOC on Oct 25, 2018 plans to invest up to $230 million for assembling and distributing France’s Renault car in the country.

This group is the UAE distributor for Honda, Toyota, Chrysler and Volvo and some other brands, English newspaper, The News reported.

The UAE-based Al-Futaim group is planning to extend its international footprint by entering into Pakistani auto market. It has been allowed to assemble and distribute France’s Renault car in the country with an investment plan of around a fourth of a billion dollars.

This group is the UAE distributor for Honda, Toyota, Chrysler and Volvo and some other brands. In Pakistan, it wants to assemble and distribute Sports Utility Vehicles (SUVs), sedan and Light Commercial Vehicles (LCVs); however, production capacity at the plant has not been revealed.

It would be the first and the biggest investment of any Gulf states in automobile sector of Pakistan. It would be also the biggest investment among all companies who have so far approached Islamabad for licenses.

Al Futaim group is already in business in Pakistan through its subsidiary Al Ghazi Tractors Ltd since 1991. Al Ghazi Tractors is located in Karachi and the company operates a manufacturing plant at Dera Ghazi Khan, manufacturing New Holland (Fiat) tractors in technical collaboration with Case New Holland.

With the new investment and entrants in the sector would not only help in breaking the existing dominance of  three Japanese car assemblers, bringing down prices, good quality but also help boost in jobs opportunities and overall industrial sector. Currently, the existing three Japanese’ car assemblers i.e. Toyota, Honda and Suzuki are sharing around 0.4 million car market of the country. Besides, every year around 50,000 imported used cars are also entering the market every year.

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