Hyundai Nishat Motor starts mass production

KARACHI: Mass production of Hyundai Porter H-100 pickup has started at Hyundai Nishat Motor (Private) Limited’s (HNMPL) assembly plant in Faisalabad, the company said on Wednesday.

“With an annual production capacity of up to 15,000 units per annum in its initial phase, Hyundai’s manufacturing plant is now fully operational.”

The company statement said the start of production takes place just two years after the ground breaking in December 2017. “The HNMPL plant is the new production home for Hyundai’s first ‘Make in Pakistan’ product, the Porter H-100 Pickup, with other exciting range of models to follow in near future.”

Analysts said Hyundai's return to Pakistan will to shake up the Japanese-dominated car market and loosen the grip of Toyota, Honda and Suzuki, who assemble cars in Pakistan with local partners.

Hyundai used to assemble cars in Pakistan until 2004 but withdrew after its local partner Dewan Farooque Motors Limited went bust. Present Hyundai partner Nishat Mills is a subsidiary of Nishat Group, a giant in the Pakistani banking, textiles, energy and cement sectors.

Tatsuya Sato, chief operating officer of HNMPL, said the company is “proud to open (a) new production facility in Pakistan”.

“Now fully in operation, our new plant allows us to serve the transportation requirements of Pakistan’s market, with world class Hyundai’s product line that enjoys a strong legacy in the local market,” Sato added.

“In the longer run, we aim to make it a vital part of our global production network.” In 2016, French carmaker Renault also agreed to invest in a new factory in Pakistan and South Korean carmaker Kia Motor Co said it would also start assembling cars in a joint venture with Karachi-listed Lucky Cement, part of the vast conglomerate Yunus Brothers Group.

However, the local automobile industry is going through its worst crisis amid rising prices due to imposition of higher taxes and steep currency devaluation. Sale of vehicles has dropped by 40 to 60 since April 2019. As a result, Honda and Toyota has laid off hundreds of employees.

Latest industry data showed passenger car sales plunged 38 percent in December for a 9th consecutive month with no sign of an immediate recovery as rising prices and high cost of auto loans pinch buyers.

Figures released by Pakistan Automotive Manufacturers Association (PAMA) for first half of FY20, showed that the passenger car sales dropped to only 9,987 units in the last month of the previous year from 16,141 units sold during the same period in 2018.

Passenger car sales in the cumulative period (July-Dec) or the first half sank 43 percent to 59,097 units, compared to 104,038 units sold in the corresponding period last year.