Economy, Auto
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Renault to Invest $100m in Pakistan Factory

Renault is going to challenge Suzuki’s dominance in the Pakistani auto market.Renault is going to challenge Suzuki’s dominance in the Pakistani auto market.

France’s top automaker Renault has reportedly decided to start assembling cars in Pakistan by 2018 under the newly approved incentives announced in its five-year auto policy, official sources said.

“Renault’s Board of Directors has taken a decision in principle to invest in Pakistan. However, details of the proposed investment plan are yet to be finalized,” the sources added.

Renault, sources said, would enter the Pakistani market as a joint venture with Gandhara Nisan Limited. The company will invest about $100 million in Pakistan, Business Recorder reported.

Board of Investment Chairman Miftah Ismail said bringing a top French or German auto assembler to Pakistan was the only option to force existing Japanese assemblers in Pakistan to reduce prices of their brands.

“Renault has promised the finance minister and me that they will assemble each and every model in Pakistan and the quality of the cars would be the same as those running on the roads of Paris,” he added.

Initially, the company will assemble/manufacture 100,000 units that are expected to bring down the prices of cars in Pakistan.

Pakistani consumers will be given a choice to purchase cars of another company manufacturing cars far better than Pakistan’s existing players.

The Economic Coordination Committee of the Cabinet headed by finance minister reviewed the auto policy and recommended new measures for expansion, investment and consumer protection in the auto sector.

The committee held several meetings and interacted with all stakeholders and came up with new policy package to attract greenfield investment as well as revive the closed auto units in the country.

Three Japanese players are not ready to invest in Pakistan without incentives at par with new players. Suzuki has indicated that it would shift its investment to Iran in case incentives are not given to its new models.

Pak Suzuki management at a recent meeting of Senate Standing Committee on Industries and Production sought help from lawmakers to support investment in the domestic auto industry through the creation of an enabling environment of make-in-Pakistan as the domestic economy is now at the takeoff stage and demand for automobiles is expected to experience rapid growth.

However, the fruits of Automotive Development Plan could only be achieved by promoting long-term investment in the country and discouraging the import of secondhand cars through misuse of schemes meant for overseas Pakistanis, said the Pak Suzuki management.

 

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