German auto manufacturer Volkswagen has planned to set up an auto manufacturing and assembly plant in Pakistan with an investment of $135 Million. The plant is planned to be set up in the province of Baluchistan. According to sources land has also been acquired for the proposed plant and construction is expected to start within the next few days.
This plant is a joint venture between Volkswagen and Karachi-based Premier Motor Limited for assembling/manufacturing of vehicles covered under its contract agreement. Currently Premier Motors is the sole distributor of Audi car in the country. They were recently given ‘category-A Greenfield investment status’ by the ministry of industries and production.
The plant is expected to start rolling out its vehicles by 2021 and would initially manufacture vans and double cabin vehicles before moving on to sedans and hatchbacks.
A lot of foreign Auto companies have shown interest in setting up manufacturing and assembling plants in Pakistan since the government launched a five-year automobile development policy 2016/21 to attract investments in the auto sector. Up till now at least 15 foreign companies have expressed interest to avail the benefits of the policy and to manufacture trucks, cars, and sports utility vehicles. The most recent entry in the market has been the Malaysian auto manufacturer Proton which is setting up its biggest Asian manufacturing plant in Pakistan.
Until now 13 companies have been provided with Greenfield status — the new investment with new technology and products – while two have been awarded Brownfield status as they want to expand their existing plants.
The new entrants in the market would help in breaking the strong cartel of three Japanese car assemblers, create competition, help in reducing prices by providing competitive products, boost the quality and create more jobs.