After Nissan, Renault to open plant in Pakistan by 2018

After Nissan Renault to open plant in Pakistan by 2018

ISLAMABAD: French automobile manufacturer Renault has decided to start assembling cars in Pakistan, a move that is expected to break the monopoly of existing industry players besides providing a chance to consumers to buy better-quality vehicles at comparatively lower prices.

Source: 24 Heures du Mans

Miftah Ismail, the BOI chairman, told Dawn that the French car manufacturer had submitted its application to the government for the manufacture of vehicles. The application is now under process at the BOI and the Engineering Development Board.

This will be the first time that a European car manufacturer will set up a plant in Pakistan.

"Groupe Renault confirms it has entered into exclusive negotiations with Ghandhara and Al Futtaim Groups to develop the Renault brand in Pakistan, including a manufacturing plant on the Ghandara site in Karachi," Renault told AFP.

Mr Ismail said that Renault would initially make an investment of $100 million to produce 6,000 vehicles per shift at the plant set up by Ghandhara Nissan Motors in Karachi. A technical team of Renault visited the plant on Thursday. Renault intends to manufacture 16,000 vehicles in three shifts and to raise the production capacity to 50,000 in two phases.

The move is expected to force the existing car assemblers to reduce prices of their brands. In the last fiscal year, sales of locally assembled vehicles rose 12% to 257,752 units, according to data compiled by the Pakistan Automotive Manufacturers Association.

According to the BOI chief, Renault will manufacture both SUVs and sedan cars.