Dewan Group partners with South Korean automaker to re-launch Shehzore

Production starts at old factory in Sujawal with capacity of 20,000 units per year

The earlier model of Shehzore was the result of a joint venture between South Korean giant Hyundai Motor Company and Dewan Group. PHOTO: FARHAN ZAHEER

KARACHI: After a gap of seven years, Shehzore truck is finally out in the market, marking the first Brownfield project to resume production after the announcement of new auto policy in 2016.

This time Dewan Group has partnered with Kolao Group, a South Korean automobile maker that has presence in 60 countries.

“We have faced extremely difficult times during the last seven years, knocked many doors and then finally found a partner in Kolao Group,” Yousuf Dewan Companies Chairman Dewan Muhammad Yousuf Farooqui said during the launch ceremony of Daehan Shehzore truck at Mohatta Palace Museum, Karachi.

Dewan Group entered into a joint venture with Kolao Group in April 2016 and formed Daehan-Dewan Motor Company which has now started producing Daehan Shehzore at its previous assembly plant in Sujawal, Sindh. The production capacity of the factory is 20,000 units per annum on double-shift basis.

Dewan Farooque Motors to resume vehicle production from February

Since the announcement of the five-year auto policy in March 2016, auto giants from South Korea, Germany and France have been drawn to the Pakistani market.

According to a rough estimate, new investments of over $800 million are being made in the auto industry either through direct joint ventures between Pakistani companies and global auto giants or by domestic auto part manufacturers in Pakistan.

The earlier model of Shehzore was the result of a joint venture between South Korean giant Hyundai Motor Company and Dewan Group. Hyundai Shehzore remained in continuous production from 1999 to 2010. The new truck has a different design but its diesel engine capacity is still the same at 2,600cc.

“I promise that the new Shehzore will not be inferior in quality compared to its earlier Hyundai version,” Farooqui stressed.

Currently, the new joint venture company is producing Shehzore 1.5-ton truck with dual rear wheels for more payload capacity with plans to launch the single rear wheel version later. The company will also introduce a sports utility vehicle (SUVs) in the first quarter of 2019.

“We have tested this truck in almost every tough terrain in Pakistan. So we expect it to meet the toughest criterion of Pakistani customers who usually overload their vehicles,” Daehan-Dewan Motor Company CEO Mohammad Saleem Baig said while talking to The Express Tribune after the launch ceremony.

New auto players to invest over $800m in Pakistan

Currently, Pakistan’s light truck market segment is wide open for Shehzore due to a lack of competition. However, in the next few years a number of Chinese light truck makers are expected to assemble trucks in Pakistan with a corresponding increase in competition for Shehzore.

Speaking on the occasion, Kolao Group Chairman Oh Sei Young commented that his company will do its best to develop the automobile industry of Pakistan by sharing its experience and technology.

Dewan’s experience in auto mobile industry and Shehzore’s strong brand recognition are some of the strong points of the new truck, but its success will also depend on its price, a leading auto part maker commented on condition of anonymity because it could hurt his business interests.

The company has not announced the price yet but industry officials say the price will be at least Rs1.7 million. Company officials say they are in talks with dealers and will announce the new Shehzore price when its sales start in the next few weeks.

Minister for Planning, Development and Reform Ahsan Iqbal said the development of major infrastructure projects in the country, including motorways, is expected to increase the demand for automobiles in future.

“This century is all about economic development and competition among countries. Those who plan better will go ahead while those who fail will fall behind,” he stressed.

Automobile sales in Pakistan, including pick-ups and trucks, have remained strong in the last few years. Higher economic growth, improving security situation and higher bank financing have all contributed to supporting the sales of vehicles in the country.

Published in The Express Tribune, February 27th, 2018.

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