KARACHI: Nishat Mills Limited (NML), one of the largest integrated textiles mills in the country, announced on Friday that it would hold the ground-breaking ceremony of its automobile plant – a joint venture with Hyundai Motor Corporation (HMC) – on December 20, 2017.
Hyundai Nishat Motor (Pvt) Limited, a subsidiary of NML that entered into an investment agreement with HMC earlier in February, has production facilities in M-3, Industrial City, Sahianwala, FIEDMC, Faisalabad, according to a company notice sent to the Pakistan Stock Exchange (PSX).
The news is an important development for the industry because Lucky Cement, one of the largest cement makers in Pakistan that had announced its partnership with Kia Motor Co just two months before NML’s joint venture with HMC, is fast executing its plans at its Karachi plant.
The NML’s joint venture will produce HMC passenger cars and 1-ton range commercial vehicles in Pakistan.
After the announcement of the new auto policy in March 2016, a number of foreign automobile companies have announced to set up their plants in Pakistan.
Both leading Korean automobile companies, Hyundai and Kia, used to assemble cars in Pakistan but left the market mainly due to the liberal used car import policy in the Musharraf regime.
The sharp increase in the import of used cars massively hit Korean brands that were still trying to consolidate their footprint against well-entrenched Japanese car makers.
The re-entry of Korean brands has been considered a big success of the PML-N government, which took over two years in announcing the new auto policy to give incentives to new entrants and those who left Pakistan earlier.
The government wanted to encourage new players to invest in the local market, which is currently dominated by three Japanese players.
Pakistan’s car penetration of 13 vehicles per 1,000 persons is significantly lower than the regional average of 162, signifying strong potential for automobile growth due to growing disposable income and low interest rate in the country.