Dewan back in action

Tougher times have come and passed it by but Dewan has managed to keep its head above water, enough to enjoy the latest spoils in the auto industry courtesy the new auto policy. Soon after the policy was announced, Dewan entered into a joint venture with Kolao Group of South Korea to bring Daehan Shehzore pickups to the Pakistani market, putting its existing assembly line to use—the plant has a nameplate capacity of 20,000 units. The pickups were launched on Sunday.

While the three Japanese based automobile assemblers in the country have maintained their status as the torch bearers of the industry, Dewan has been a recurrent presence. The company launched its first cars into Pakistan getting into partnership with Korean Kia and Hyundai but could only sell for 10 years until it fell into a financial pit hole of its own making.

Between 2000 and 2005, Dewan sold 6,369 units of Kia Spectra and Classic that it assembled. Santro on the other hand, was a relative success selling 36,519 units up till 2010. The pickup Hyundai Shehzore—of which a new version is now being re-launched—was even more successful finding market for 50,000 units during the period.

Since these ventures fell through, Dewan was in dire straits financially and could not attain more loans. It had been shopping for a partner that would invest and use its facilities while it continued to remain in operation as a distributor of high-end BMWs, Rolls Royce and Mini Cooper in Pakistan. Dewan’s accumulated losses as at June 2017 amounted to Rs3.426 billion and a pending mark-up for loans amounting to nearly Rs5 billion.

The Engineering Development Board (EDB)’s decision to green light the Dewan-Daehan project came off as a surprise to some as the company continues to get itself in financial quicksand. Perhaps the assembly line put in full production mode might help it to bounce back. The company also has plans to introduce an SUV in direct competition with Toyota’s Fortuner which has garnered a lot of interest from consumers.

Though the opportunity for Dewan is tremendous, there is a lot of upcoming competition from new and old players in the category as the tide turns in the market for heavy and light commercial vehicles.