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Al-Futtaim Group to invest $230m in Pakistan’s automobile sector

ISLAMABAD: Al-Futtaim Group, a large conglomerate operating in the United Arab Emirates, has decided to invest $230 million in Pakistan’s automobile sector through a joint venture (JV) with French carmaker, Renault.
Officials of the Engineering Development Board (EDB) told Pakistan Today that Renault has formally given an application with regard to establishing an assembling plant in Pakistan. The company has acquired 54 acres of land in the Faisalabad Industrial Estate Development and Management Company (FIEDMC), the largest industrial zone in the country.
The latest technology-oriented cars of Al Futtaim-Renault are expected to hit the roads in 2020, officials said, adding that 12 automobile companies have made an investment of $746 million under the Auto Development Policy (ADP) 2016-21.
Officials stated that the government has given 10 companies the status of ‘green field investment’, a type of foreign direct investment (FDI) where a parent company builds its operations in a foreign country from the ground up, while two companies have been given ‘brown field investment’ status, where a company or government entity purchases or leases existing production facilities to launch a new production activity.
As per the documents available with this scribe, Regal Automobile Industries in collaboration with DFSK Motor have invested $10.71 million to assemble light commercial vehicles (LCV) and sports utility vehicles (SUV).
Similarly, United Motors (Pvt) Limited in partnership with Luoyang Dahe New Energy Vehicle and Yangste Motor Group have invested $19.05 million to assemble 800cc passenger cars, 1,000cc LCVs (pick up) and vans.
Khalid Mushtaq Motors (Pvt) Ltd in a JV with Changan Kuayua Automobiles has invested $3.50 million to assemble LCVs. Kia Lucky Motors Pakistan Ltd, with the assistance of Kia Motors, has invested $190 million in the country’s automobile sector.
Hyundai Nishat Motors (Pvt) Limited in a JV with Hyundai Motors will establish an assembling unit to manufacturer LCVs, electric cars and SUVs with an investment of $163million. In addition, Foton JW Auto Park (Pvt) Ltd in collaboration with Changsha Foton Vehicle Technology will invest $11.45 million to manufacture LCVs and heavy commercial vehicles.
Sagzar Engineering Works Ltd in partnership with BAIC International Development Company will make an investment of $31.01 million. Master Motors Ltd in a JV with Chongging Changan Automobile, Changan International Cooperation and IVECO will invest $101.52 million, Pak China Motors in partnership with Chongging Lifan Automobile will invest $24.25 million, while Topsun Motors and Engineering Services in collaboration with Chongging Big S and T Dev Group as well as Mianyang Huarui Automotive will invest $5.43 million in Pakistan’s automobile sector.
Dewan Farooq Motors in partnership with Ssang, Kia and Kolao Group of South Korea/Laos will invest $145 million, and Ghandhara Nissan in a JV with Nissan Motor Cooperation Japan will invest $41.3 million to manufacturer LCVs, SUVs and passenger cars. Both the abovestated companies got the status of brown field investment.
Talking to Pakistan Today, EDB policy in-charge Muhammad Asim said that most of the company’s products will come on the roads in 2019, adding that EDB is facilitating fresh investments in the auto sector from new companies through joint ventures with foreign players.
It is pertinent to mention that the previous government had announced the five-year auto policy in March 2016. Subsequently, auto giants from South Korea, Germany and France have been quickly drawn into the Pakistan market. Kia and Hyundai have already started working on their assembly plants.