Pakistan announced its Automobile Development Policy 2016-21 in order to attract more automakers to invest in the country, also to generate competition in the market, reduce the high prices, shorten the delivery period and curb the menace of premium/ own money.
Renowned South Korean brand Hyundai was the first one to get the Greenfield investment status under the new auto policy to assemble and sell its products in Pakistan. Hyundai marking its comeback in Pakistan has teamed up with Nishat group while the groundbreaking ceremony of their vehicle assembly plant at Faisalabad’s M-3 Industrial City took place in December 2017.
The Hyundai-Nishat Motors (Pvt) Limited (HNMPL) venture will see an investment of US $230 Million. The construction of the assembly plant is expected to complete by the end of 2019 while the operations will begin in early 2020.
According to a Hyundai official, locally-assembled Hyundai cars will roll out by March 2020. The company plans to produce 7,000 units in its first year, while it aims to expand its production capacity to 22,000 units within three years.
According to HNMPL’s production plan, the company will reportedly start its assembly operations with H100 1-ton commercial pickup, followed by the Tucson SUV, Kona Crossover and Elantra sedan. According to a company official, evaluation of a 1000cc hatchback is also underway, however nothing regarding the launch of a budget-friendly options is finalized at this stage.
If we observe the lineup, none of the cars will actually create problems for the volume sellers of our market. The primary goal of the auto policy was to create competition between players, shorten the delivery period, bring down prices and improve the quality of products offered to the customers.
While every newcomer is targeting the commercial vehicle sector, which is obvious due to CPEC related activities, demand of commercial vehicles in our market has increased like never before. However as far as passenger vehicles are concerned, the Tucson SUV, Kona Crossover and the Elantra sedan are all considered premium offerings and won’t create any troubles for mass-produced Toyota, Honda and Suzuki models in our market.
Initially there were a lot of speculations regarding Hyundai’s product lineup however as of now, no budget-friendly vehicle seems to be under consideration, at least at this stage. Hyundai do have some impressive small cars such as the Eon, i10, i20 and the Verna, which are targeted specifically towards emerging markets and have the potential to create problems for the existing players of our market.
Another South Korean automaker making a comeback in Pakistani market, Kia Motors launched its luxury MPV, the Grand Carnival earlier this year at prices ranging from PKR 40 lac to PKR 48 lac. It will be followed by the Kia Sportage SUV and that too will be priced above PKR 30 lac thus catering to those with deep pockets.
The launch of local assembled Hyundai cars is still a year away, but vehicles such as the ones specified in their launch plans will target only those consumers with good purchase power and might not justify the sole purpose of the auto policy, that was to create competition, shorten the delivery period & bring down the vehicle prices in Pakistan.
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