The
groundbreaking ceremony of the Hyundai Nishat vehicle assembly plant at
Faisalabad's M-3 Industrial City took place on Wednesday, with local
production of vehicles expected to begin within two years.
Hyundai Nishat Motor Ltd signed an investment agreement with the Ministry of Industries and Production
under the Automotive Development Policy 2016-21 earlier this week to
set up a greenfield project to undertake assembly and sale of passenger
and one-tonne commercial vehicles.
The plant is a joint venture between the Hyundai Motor Company and local textile firm Nishat Mills.
Prime
Minister Shahid Khaqan Abbasi, while addressing the ceremony, said that
despite Pakistan's instabilities and issues over the last few years,
"the path to progress has continued. This is manifestation of the trust
the investor has in Pakistan's policies."
Abbasi assured
attendees that the country was ripe for investment and the investors
were beginning to see it. "Pakistan is not what you see on CNN, this is the real Pakistan," he said. "Pakistan is a story of many successes," he added.
He thanked the Hyundai and Nishat groups for collaborating to invest in Pakistan.
Hyundai's
return to Pakistan will boost the government's efforts 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
and South Korea's Kia Motor used to assemble cars in Pakistan until
2004 but withdrew after their local partner Dewan Farooque Motors
Limited went bust.
Nishat Mills is a subsidiary of Nishat Group, a giant in the Pakistani banking, textiles, energy and cement sectors.
Last
year, French carmaker Renault agreed to invest in a new factory in
Pakistan and South Korean carmaker Kia Motor Co said it would start
assembling cars in a joint venture with Karachi-listed Lucky Cement,
part of the vast conglomerate Yunus Brothers Group.
The
government believes increased competition should bring down
exceptionally high car prices in Pakistan, and in March it introduced a
new auto policy favouring new entrants into the market by offering
generous import duties.
The incentives have angered existing market players, some of whom have said publicly they should get similar terms.
Pakistan,
with a population of nearly 200 million people, is a potentially huge
market, but just 180,000 cars were sold in the 2014/2015 fiscal year.
That compares with more than 2 million passenger vehicles a year in
neighbouring India.
