S Korean firm to locally assemble SUVs next year

KARACHI: South Korean automaker SsangYong Motor Company planned to roll out its premier sports utility vehicles (SUVs) in Pakistan early next year, a company’s statement said on Tuesday, as demand of high-end vehicles is increasing in the country.

SsangYong’s senior management recently visited Pakistan to deliberate and finalise plans with the officials of Daehan Dewan Motor Company (DDMC) for introducing SUVs, the statement said. The delegation also visited auto assembly plant of Dewan Farooque Motors, located in Sujawal, Sindh.

“Having DDMC as business partner that has recently been awarded with the brownfield status from the government will enable SsangYong to establish its foothold in Pakistan,” the statement added. “Automotive Development Policy (2016-21) has been successful in attracting healthy investment from some of the leading international automobile manufacturers.”

At least four other new players, including Kia, Hyundai, Renault, and Volkswagen are also planning investments in the country’s auto market of over 250,000 catered by primarily three Japanese companies Honda, Toyota and Suzuki. Cars production grew more than five percent during the last fiscal year of 2016/17.

First Capital Equities said the new auto development policy is on an implementation course “and the threat of competition with added cost advantage is becoming a reality”.

“DDMC has launched Shehzore and planned to launch SUV next year, while works on other companies’ plants are also in progress,” the brokerage said in a report. “Companies have pricing power till competition from new/reviving players become material expected towards end of CY19. Thus, any material costs will be passed on in short term while in longer term margins are expected to feel the brunt.” DDMC is a joint venture between Yousuf Dewan Companies and the Kolao Group of South Korea that was established in April 2016.