News Desk |
French carmaker Renault, one of the many new entrants in the previously monopolized Pakistani auto industry, will start vehicle production in Pakistan in 2020, a newcomer which might give wider choice to frustrated consumers. For setting up an automobile assembly plant, the company has leased 54 acres of land in the Faisalabad Industrial Estate Development and Management Company (FIEDMC), the largest industrial zone in the country, and will invest $140 million, which is a staggering amount as compared to the meager $18 Million that United has started its car assembly line from.
Earlier this year, Pakistan Steel Mills decided to back out of a land deal with Renault. Pakistan Steel Mills, which had earlier come to an understanding with Renault, backed out and refused to provide land for the manufacturing facility, a local publication reported, quoting an official of the Ministry of Industries and Production.
The French company Renault is considered to be among the more prominent of the new entrants. It is reported that Renault has entered into a definitive agreement with Al-Futtaim to gain access to the Pakistani market.
The official said that Renault had approached the ministry with a complaint that the National Industrial Parks Development and Management Company (NIP) had been coercing the automaker to sign an open-ended undertaking for bearing any increase in the cost of land being provided for setting up the vehicle manufacturing plant in Karachi.
The Al-Futtaim Group, one of the biggest conglomerates of the United Arab Emirates (UAE) which has its footprints in 29 countries and global automotive operations in 11 markets across Africa, the Middle East and South Asia, has started this project in partnership with French automaker Renault Automotive. The plant is reported to have installed capacity of 50,000 vehicles per year and initially, the company may roll out five vehicle variants. The joint venture, which wants to become a major car assembler in Pakistan, will also establish a dealership network for a smooth sale of its vehicles across the country.
Both international players, as well as local manufacturers, are prepared to introduce new models in the car market. The new entrants range from French automaker Renault to Korean carmakers such as KIA and Hyundai as well as Chinese firms, GVS had earlier reported. The French company Renault is considered to be among the more prominent of the new entrants. It is reported that Renault has entered into a definitive agreement with Al-Futtaim to gain access to the Pakistani market.
According to the deal, Renault will bring its latest products and technology while Al-Futtaim will establish a new manufacturing and assembly plant and distribute the cars. It is expected that the Renault SUV Duster will be the first vehicle to be co-launched by Renault and Al-Futtaim. In June 2020, Renault cars may hit roads. Display offices of the Al-Futtaim Renault venture may be built by the end of 2019 as work on many offices has begun in different cities of Pakistan.