Volkswagen Commercial Vehicles is in final talks with Premier Systems Private Limited – the authorised importer of Audi vehicles in the country – to set up a manufacturing/assembly plant for its Amarok and T6 (transporter range) models and Volkswagen to launch two new vehicles in Pakistan.
The launch of the two vehicles – Amarok is a direct competitor to Toyota’s Revo and the T6 is a multi-seat passenger van – comes on the back of forecasted demand arising from the China-Pakistan Economic Corridor.
Volkswagen is planning to give around 40 dealerships across the country as they believe that such robust vehicles are now becoming a need of Pakistan.
Volkswagen Commercial will use the same plant Audi intends to build for the assembly of its own vehicles in Karachi. Audi AG, the German carmaker, is owned by the Volkswagen Group.
Back in November, Audi has expressed its interest to establish a plant in the Korangi industrial area, Karachi. The plant will facilitate the assembly/manufacturing of Volkswagen vehicles as well and could see its passenger cars also making an entry.
Premier Systems will be making the necessary arrangements in Pakistan as Audi and Volkswagen both make their move to assemble vehicles.
Test vehicles, a standard practice before any new model is launched, will do trial runs across the country. The exercise is meant to gauge Pakistan’s terrain and roads with the vehicles being driven around in camouflage by German drivers. These will then be sent back to Germany for feedback and changes, if necessary.
One of the biggest reasons for the entry of Volkswagen will be the high-quality diesel Pakistan refineries are set to produce from July 1. Diesel will now be produced with a sulphur limit of 500ppm and facilitates sulphate particulate emission reductions, necessary for meeting emission standards for heavy-duty highway engines. Oil marketing companies are already importing the same quality of diesel.
The development is a huge boost to Pakistan, given low levels of foreign direct investment and falling exports. Experts say investment is the key to guarding against Pakistan’s economic shortfalls such as a widening trade and current account deficits, slowdown in the growth of remittance and falling exports.
The Audi plant alone would mean an investment of around $30 million. The assembly of Volkswagen could take the amount way higher.
The development follows multiple reports and announcements of various carmakers to venture into the Pakistani market. Recently, Nishat Mills – a textile giant – announced a joint venture agreement with Hyundai to assemble vehicles in Pakistan.
Lucky Cement – one of the country’s largest cement makers – has already announced to partner with Kia Motors and Renault is in talks with Ghandhara to use its plant for car assembly.
Pak Suzuki has also said that it is willing to bring in fresh investment while Honda also launched its flagship Civic model last year.
