Pakistan is hoping that $2 billion will make its way into the country as it seeks investment in its auto sector with the arrival of four new companies.
Under the auto policy, four companies have been granted permission to set up their assembly/manufacturing plants in Pakistan. It had been reported in June that three companies were granted permission by the government, a move that would result in a total investment of $372 million.
However, a government official with knowledge on the matter said that authorities are expecting a total of $2 billion to make its way into the country as the number of companies interested in setting up their plants goes up. “One plant needs an investment of around $500 million,” the official said. “Hence, we hope and believe that these four auto manufacturing plants will invest $2 billion in the automobile industry.”
He added that within a week, two more firms be allowed to set up plants which is expected to attract around $1 billion as investment.
Meanwhile, he said that a total of nine companies had applied to set up new manufacturing plants and four had been granted permission already, whereas two had completed documents and would be given the go-ahead in a week.
It was earlier reported that United Motors Private Limited, Kia-Lucky Motors Pakistan Limited and Nishat Group, which is collaborating with Hyundai, have been granted permission. Moreover, the official said that Regal Automobile Industries Limited Karachi has also been given permission.
The remaining five entrants who have applied include Habib Rafiq Private Limited, Khalid Mushtaq Motors, Pak-China Motors, Foton JW Auto Park, and Cavalier Automotive Corporation.
According to experts, the rise in demand for vehicles with rising middle class as well as CPEC transportation and trade needs will be driving the automotive sector over the next few years.
Locally assembled car sales (including Light Commercial Vehicles, Vans and Jeeps) jumped by 14% in fiscal year 2016-17 (FY17) ending on June 30.
Truck and bus sales of PAMA member companies in FY17 remained strong, growing 31% year-on-year.