1000cc or 800cc to Manufacture first? : Nishat’s Decision Impending
LAHORE: Nishat Group, one of the biggest multinational business corporations, has recently made an announcement that it will be making inroads into Pakistan’s most rapidly growing automobile industry and thus has signed a contract with the South Korean car manufacturer, Hyundai Motor Company. The joint venture would be concentrating on the production of hybrid cars.
Such expansions come in the conditions of the new Automotive Policy 2016-21 released by the government in March of 2016. Presuming severe competition with new market faces that have received incentives from the auto policy, preexisting auto manufacturers have also brought new models and declared new investment scenarios.
The Nishat Group had decided to enter the auto sector in 2012, but the deficiency of incentives for new investments averted it from initiating any new project.
Norez Abdullah, Chief Financial Officer of Hyundai Nishat Motor Limited recalled in an interview: “We endeavored to venture into the automobile sector back in 2012, but the policies at that time were not favorable.”
“The new auto policy has brought incentives for the fresh players based on which we have come to a decision to enter this section; Hyundai come up to us and now we have initiated the new venture,” he said.
The brand aims to pioneer hybrid electric cars in Pakistan, but the infrastructure for the new technology is proving to be too expensive. Abdullah said that presently, both the parties were engaged in feasibility studies to evaluate the scope of hybrid electric cars in the country.
“Hyundai has already initiated hybrid electric cars in markets of the US. We aim to initiate the same model “Ioniq” in Pakistan as the market for such cars is developing here and people do not have much of a choice right now,” Abdullah stated.
“Presently, we are trying to persuade our partner about the potential, but technological matters are yet to be determined as the technology is selective, nevertheless, introducing such a variant will always be an opportunity.”
Nishat Group is willing to pour an investment of nearly $120 million into fabricating an assembly plant somewhere near Faisalabad. Both the corporative partners have yet to come to a decision for which model to start.
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“We will manufacture fuel-efficient engines with cost competitiveness to fare well in the marketplace. Presently, we are carrying out consumer inspections and then we will make our mind up whether to start with 800cc or 1,000cc engine class,” stated Abdullah.