Dewan Farooque Motors Limited (DFML) announced on Monday that it has entered into a Technology License Agreement (TLA) with Korea's KIA Corporation for the production and assembly of its vehicles in Pakistan.

The development was announced through a Pakistan Stock Exchange (PSX) notice.

DFML, currently in the defaulter segment, has already seen its stock price surge 150% in less than a month — from Rs4.5 to Rs11.41 at close of trading on Monday. The KSE-100 Index has hardly moved during this period.

Its financial results indicate it is running losses with a loss per share (LPS) of Rs1.33 for fiscal year ended June 2022, and another LPS of Rs0.76 in the first quarter (July-Sep) of FY23.

Currently, Lucky Motor Corporation Limited (LMC) is assembling KIA brand vehicles in Pakistan, and produces SUVs Sorento, Sportage, Stonic and hatchback Picanto. It is also the assembler of French automaker's SUV Peugeot 2008.

“There is no clarity on whether Dewan Farooque Motors would enter the passenger cars' segment or commercial vehicles,” Ismail Iqbal Securities' auto sector analyst Muqeet Naeem told Business Recorder after the announcement.

If the plan goes through, it will not be the first time DFML will assemble KIA-brand vehicles in Pakistan.

An earlier report suggested the company produced 95,429 automobiles – including Kia Classic, Kia Spectra, Sportage – between 2000 and 2011.