The South Korean KIA motors to set up assembly plant in Pakistan is the latest news for the auto industry. The Yunus Brothers Group (YBP) is also in talks with them for the same.
YBG is also Lucky Cement and ICI Pakistan’s sponsor while it is in negotiations with Kia. This was confirmed through the BIPL Securities on Monday while very little details are available. It is also Kia’s latest initiative while Nissan-Renault has already showed its interest to build their assembly plant in Pakistan. Thus, the fruits of the auto policy are quite visible.
The motivation behind
According to BIPL, strong growth potential under CPEC demand, low interest rate, and attractive incentives policy has made it possible. Growing car market is also one of the reasons as 17% growth was seen in three years till 30th June. Pakistan has a car penetration of 13 vehicles per thousand people which is the lowest in the region. It is also 55% below the benchmark.
The assembly plant is surely going to take two to three years to be operational. However, the size and specifications aren’t known yet. If you look at the auto policy plan, it is a win-win situation for both partners. The plan includes doubling production of cars, vans, and jeeps and other light commercial vehicles. On one hand, a new market will be available for one partner while the other will expand its operations.
Kia Classic NGV and Kia Spectra from 1999 to 2000 and 2004 to 2005 have already been experienced by Pakistanis through Dewan Motors’ joint ventures.