$100 million potential investment: Renault to start assembling cars by 2018

France's top automaker M/s Renault has reportedly decided to start assembling cars in Pakistan by 2018 under the newly approved incentives announced in five years Auto Policy, official sources told Business Recorder.
"Renault's Board of Directors (BoD) has taken a decision in principle to invest in Pakistan, however, details of the proposed investment plan is yet to be finalised," the sources added.
M/s Renault, sources said, would enter the Pakistani market as a Joint Venture (JV) with Ghandhara Nisan Limited. The company will invest about $ 100 million in Pakistan.
Board of Investment (BoI) Chairman Dr Miftah Ismail told Business Recorder that bringing a top French or German auto assembler to Pakistan was the only option to force existing Japanese assemblers in Pakistan to reduce prices of their brands.
"M/s Renault has promised the Finance Minister and me that they will assemble each and every model in Pakistan and the quality of the cars would be the same as those running on the roads of Paris," he added. Initially, the company will assemble/manufacture 100,000 units which will certainly bring down the prices of existing Pakistani cars.
Pakistani consumers will be given a choice to purchase cars of another company which manufacture cars far better than Pakistan's existing players.
According to the background, the Economic Co-ordination Committee (ECC) of the Cabinet headed by Finance Minister constituted a committee to review the Auto Policy and recommended new measures for expansion, investment and consumer protection in auto sector.
The committee was headed by Khawaja Muhammad Asif, Minister for Water & Power and included Dr Miftah Ismail, Minister of State/Chairman Board of Investment. The committee held several meetings and interacted with all stakeholders and came up with new policy package to attract Greenfield investment as well as revive the existing closed auto units in the country. The engineering side draft of the policy was prepared by Engineering Development Board (EDB) whereas Dr Ismail prepared financial part of the policy. After approval of the policy Dr Ismail held number of meetings and made efforts to attract investment in auto sector. He met stakeholders of the sector in Pakistan and also went abroad to lure foreign companies in the auto sector. He met foreign companies like Volkswagen, Peugeot, Renault, Fiat and Nissan. During the Eid-ul-Azha holidays, Ishaq Dar himself along with Dr Ismail visited France and met the top leadership of Renault.
Existing three Japanese players are not ready to invest in Pakistan sans incentives at par with new players. M/s Suzuki has indicated that it would shift its investment to Iran in case incentives are not given on its new models.
Pak Suzuki management at a recent meeting of Senate Standing Committee on Industries and Production sought help from law makers to support investment in the domestic auto industry through creation of an enabling environment of make-in-Pakistan as Pakistan's economy is now at the take-off stage and demand for automobiles is expected to experience rapid growth.
However, the fruits of the Automotive Development Plan (2016-21) could only be achieved by promoting long-term investment in the country and discouraging the import of used cars through misuse of schemes meant for overseas Pakistanis, said the Pak Suzuki management.