ISLAMABAD: The UAE-based Al-Futaim group is planning to extend its international footprint by entering into Pakistani auto market, as it has formally requested Islamabad for getting approval for assembling and distributing France’s Renault car in the country with an investment plan of around a fourth of a billion dollars.
This family-owned enterprise of the UAE has applied for getting permission and sent its application to the Pakistani Board of Investment (BoI) — a body that facilitates the local and foreign investors in materialization their projects. The company wants to invest $200 to 230 million dollars in the sector, official sources told The News on Monday.
It is worth mentioning that this group is UAE distributor for Honda, Toyota, Chrysler and Volvo and some other brands. In Pakistan, it wants to assemble and distribute Sports Utility Vehicles (SUVs), Sedan and Light Commercial Vehicles (LCVs); however, production capacity at the plant has not been revealed.
After receiving the application, BOI has forwarded the application to the Ministry of Industries and Production for further processing, the official said. Since, the new auto development policy has been operational and has been liberalised; various auto players had approached the government for having permission to set up their plants.
In March 2016, after the PML-N government launch of the five-year Automobile Development Policy 2016/21, the inflow of investment and new entrants was anticipated from the world big brands including Germany, France and South Korea. If the transaction matures after the approval of Pakistani government, it would be the first and the biggest investment of any Gulf States in Automobile sector of Pakistan in. It would be also the biggest investment among all companies who have so far approached Islamabad for licenses.
Official said that the government is evaluating the company’s application and also working on it with the regulating agencies, if green-signaled, the license would be granted to the company. It is worth mentioning that Al Futaim group is already in business in Pakistan through its subsidiary Al Ghazi Tractors Ltd since 1991. Al Ghazi Tractors is located in Karachi and the company operates a manufacturing plant at Dera Ghazi Khan, manufacturing New Holland (Fiat) tractors in technical collaboration with Case New Holland.
Official said that with the new investment and entrants in the sector would not only help in breaking the existing cartel of three Japanese car assemblers, bringing down prices, good quality but also help boost in jobs opportunities and overall industrial sector.
Currently, the existing three Japanese’ car assemblers i.e. Toyota, Honda and Suzuki are sharing around 0.4 million car market of the country. Besides, every year around 50,000 imported used cars are also entering in the market every year.
