Volkswagen set to launch two new vehicles in Pakistan

Published: February 14, 2017
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German giant will introduce Amarok and T6 on back of CPEC-related demand. PHOTO COURTESY: VWVORTEX

German giant will introduce Amarok and T6 on back of CPEC-related demand. PHOTO COURTESY: VWVORTEX

German giant will introduce Amarok and T6 on back of CPEC-related demand. PHOTO COURTESY: VWVORTEX Amarok is a direct competitor to Toyota’s Revo. PHOTO: COURTESY VOLKSWAGEN

KARACHI: Volkswagen Commercial Vehicles is in final talks with Premier Systems Private Limited – the authorised importer of Audi vehicles in the country – to set up a manufacturing/assembly plant for its Amarok and T6 (transporter range) models, The Express Tribune has learnt.

The launch of the two vehicles – Amarok is a direct competitor to Toyota’s Revo and the T6 is a multi-seat passenger van – comes on the back of forecasted demand arising from the China-Pakistan Economic Corridor, said an official familiar with the development.

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“Volkswagen believes that such robust vehicles are a must in Pakistan,” the official told The Express Tribune. “There will be a large dealer development and the target is to have 40 dealerships across the country.”

Volkswagen Commercial will use the same plant Audi intends to build for the assembly of its own vehicles in Karachi. Audi AG, the German carmaker, is owned by the Volkswagen Group.

In November, The Express Tribune reported that Audi has expressed its interest to establish a plant in the Korangi industrial area. The plant will facilitate the assembly/manufacturing of Volkswagen vehicles as well and could see its passenger cars also making an entry.

Premier Systems will be making the necessary arrangements in Pakistan as Audi and Volkswagen both make their move to assemble vehicles.

Ali Khan, head of automotive at Premier Systems, was unavailable to comment.

Test vehicles, a standard practice before any new model is launched, will do trial runs across the country. The exercise is meant to gauge Pakistan’s terrain and roads with the vehicles being driven around in camouflage by German drivers. These will then be sent back to Germany for feedback and changes, if necessary.

One of the biggest reasons for the entry of Volkswagen will be the high-quality diesel Pakistan refineries are set to produce from July 1. Diesel will now be produced with a sulphur limit of 500ppm and facilitates sulphate particulate emission reductions, necessary for meeting emission standards for heavy-duty highway engines. Oil marketing companies are already importing the same quality of diesel.

Audi AG expresses intent to assemble vehicles in Pakistan

Positive for Pakistan

The development is a huge boost to Pakistan, given low levels of foreign direct investment and falling exports. Experts say investment is the key to guarding against Pakistan’s economic woes such as a widening trade and current account deficits, slowdown in the growth of remittance and falling exports.

The Express Tribune reported in November that the Audi plant alone would mean an investment of around $30 million. The assembly of Volkswagen could take the amount way higher.

Competition in auto sector

The development follows multiple reports and announcements of various carmakers to venture into the Pakistani market. Recently, Nishat Mills – a textile giant – announced a joint venture agreement with Hyundai to assemble vehicles in Pakistan.

Lucky Cement – one of the country’s largest cement makers – has already announced to partner with Kia Motors and Renault is in talks with Ghandhara to use its plant for car assembly.

Pak Suzuki has also said that it is willing to bring in fresh investment while Honda also launched its flagship Civic model last year.

Published in The Express Tribune, February 14th, 2017.

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Reader Comments (18)

  • iRonMan!
    Feb 14, 2017 - 10:30AM

    only intentions and reports – nothing substantial on ground yet! Such news come and goes – no advantage to customers or Pakistan, till they have arrived or invested!Recommend

  • Careless Whisper
    Feb 14, 2017 - 10:46AM

    Pakistan economy is on the right track.. well done Pakistan Recommend

  • VW
    Feb 14, 2017 - 11:12AM

    Valkswagon needs to introduce cars in smaller car segment. They have variety of vehicles available to address the smaller and economical cars need of Pakistan which is ruled by the one and only outdated Mehran since two decades. There is a huge market. who will buy mehran in more than 7 lacs when there will be Volkswagon available under 1 million ?Recommend

  • Farah
    Feb 14, 2017 - 12:00PM

    Time is running out for Pak Suzuki Motors. Poor they, can only watch with tears a (much deserving) downfall which seems inevitable for them…..Recommend

  • Goldigger
    Feb 14, 2017 - 12:45PM

    All over the world ULSD (Ultra Low Sulfur Diesel) is standardized with sulfur content between 10-50 ppm. While the govt is now regulating up to 500 ppm. God knows what it was before.Recommend

  • Aamir
    Feb 14, 2017 - 1:02PM

    It’s a very gud decision from Audi and Volkswagen to break the monopoly of Toyota and Honda as well, specially Toyota doesn’t provide the value of money by its cars in PakistanRecommend

  • SS
    Feb 14, 2017 - 1:26PM

    So happy to see Volkswagen Group entering Pakistan. The Amarok & T6 vans are the real work horse and would do extremely well in Pakistan. VW should also introduce Polo H/B & Jetta sedan as well as both are economical and can do well in ever growing Pakistan auto market.
    ALL THE VERY BEST!Recommend

  • M. Ibrahim Marghoob
    Feb 14, 2017 - 1:38PM

    Such news is always welcomed across any sector in Pakistan. For pak suzuki, i think they need to learn a lesson from Nokia. Their CEO was up in tears as they tried their best, no doubt it is a tech giant, but due to mere change in customer demands and trends, their models stopped selling at all, once being sold like hot cakes. Nowadays, companies which adapt to the changing environment survive and grow accordinglyRecommend

  • MJ-Sid
    Feb 14, 2017 - 8:36PM

    All the people celebrating VW’s entry in to Pakistani market are in for an unpleasant surprise. VW does not produce quality cars like they used to. In US people don’t touch used VW’s with a 10 foot pole. They have multiple engine, electronics etc. issues even before they hit 100K miles. Even without considering what their corporate did with regards to the diesel scandal, their cars hold very low resale value as customers know that used VW’s are a money pit. Recommend

  • jorg schroeder
    Feb 14, 2017 - 10:28PM

    MJ -Sid ,I cant agree with you i have owned Volkswagen Vans and cars and it always happy witht both the quality interior and engine ,my cars have over 100.000kms and all is fine .I am looking at purchasing a Golf next ,you realy dont know what your talkng about Sid , the real probem is you cant afford to buy one, stick to your bike and stop dreaming.
    J.Schroeder -Adelaide, AustraliaRecommend

  • oats
    Feb 14, 2017 - 10:53PM

    @iRonMan!: Don’t you worry. You people said the same thing about motorways and metros but take a look at how many people use them and enjoy them! Haters will keep hating but as long as Nawaz Sharif keeps improving the economy and new car manufacturers keep announcing plans to come, the rest of us are happy. Go and read the Bloomberg report on Pakistan’s economy to see how things are picking up for us!Recommend

  • SS
    Feb 15, 2017 - 8:51AM

    @MJ-Sid:
    You are way off the reality brother. VOLKSWAGEN has toppled Toyota from the number one auto manufacturer in the world last month. The cars are doing extremely well across the globe.Recommend

  • Asim
    Feb 15, 2017 - 9:31AM

    This is good news indeed. New assemblers are need of the hour.
    Government must further enhance to increase incentives of new assemblers. *Efforts must be made to ensure that local assemblers, especially Paksuzuki, is not able to block entry of new assemblers. *

    Paksuzuki has been trying to obtain incentives for new-assemblers for itself. This is very unethical as the company has been availing government incentives for decades and in return is selling obsolete card from in 1980s in 2017 in Pakistan which have long been removed in the international market. i.e Mehran, Bolan, Ravi, Cultus, and Swift are all outdated models only in production in Pakistan. Recommend

  • AZL
    Feb 15, 2017 - 10:13AM

    Any thing is better then Suzuki cars and yes we really need smaller cars with economical range to break Suzuki’s mehran monoploy in the market.Recommend

  • MJ-Sid
    Feb 15, 2017 - 10:12PM

    @SS. You are entitled to your own point of view. I have been living in US for over 25 years now. I have closely worked with Auto sales and service industry. VW Passat, Jetta, Beetle (not original but the one redesigned) Touareg and some of the Golf/Rabbit have very low resale value. VW advertises the cars well below what comparable Honda and Toyota models sell for and when you go to their showrooms (VW showrooms) you can bargain them way down till they are 5 to 7 thousand dollars less than the comparable Japanese cars.
    Similarly when you go to a used car lot you can get a Passat or Jetta for peanuts when compared to an Accord or Civic. Used VW’s are a huge liability. They require constant visits to the dealerships and expensive parts. Same is true for the Mini (owned by BMW) and Land Rover SUV’s. These are all very pretty to look at, with great interiors but they fall apart really fast. Check used car values or reviews on Autotrader, Craigslist, Edmunds etc. in US and you will understand what I am saying … I bought a turbo Passat a few years ago and the engine could not even make it to 40K miles. I am speaking from personal experience as well.Recommend

  • MJ-Sid
    Feb 15, 2017 - 10:27PM

    @jorg schroeder … Maybe your (Australian market) VW’s are made in Germany? The cars that they sell in US are mostly assembled in Mexico and are notorious for having poor quality and a myriad of issues, electrical ones in particular. I wouldn’t buy or reccomend a VW for long term ownership. They advertise the 2017 Passat for $22K in California but you can go to the dealership and negotiate it down to $15K without even breaking a sweat. Try that with a Honda, Toyota or a Lexus. There is a reason that dealers are discounting VW’s because their poor reliability has done extreme damage to their reputation in US. Golf might be a bit better because it has enjoyed a huge following from enthusiasts. But slightly used Jetta, Touareg, Passats, CC and Beetle are sitting in used lots at deep discounts for a reason.

    By the way, don’t worry about what I ride or drive in California, most probably you don’t even see those cars/bikes in Australia other than in magazines or on people’s wish/bucket lists. Recommend

  • Twister292
    Feb 15, 2017 - 11:45PM

    Even Australian VWs aren’t known for long term reliability…the DSG transmissions in particular are prone to failure (esp the DQ200 dry clutch gearbox used in lower-end models). Some of them share assembly plants with Czech-made Skodas, some come from Mexico and some from Germany (high-end models like Golf GTI, Golf R, Passat 206 R-Line).

    The pickup truck mentioned in the article (Amarok) is a ticking time-bomb compared to the NG Hilux or other equivalents like the Ford PX2 Ranger, Mazda BT50, Mitsubishi Triton, Isuzu D-Max, GMC Colorado etc. The Amarok uses a 2.0L turbo-diesel with a ridiculous 18psi intake boost pressure. Try running that engine on poor quality fuel and it will eventually get a fouled turbo.Recommend

  • Twister292
    Feb 16, 2017 - 6:56PM

    @ Sid

    Amaroks are made in Argentina at the momentRecommend

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