Dewan Farooque Motors to assemble Kia vehicles

Dewan Farooque Motors has entered into a technology licence agreement (TLA) with South Korea’s automaker Kia Corporation for the production and assembly of its vehicles in Pakistan, the company announced in a notification sent to the Pakistan Stock Exchange on Monday.

With the TLA, Dewan Farooque Motors will set up an auto assembly line in Pakistan.

The decision comes at a time when the auto sector is slowing down in the backdrop of a sluggish economy.

Currently, the auto market is experiencing a lacklustre activity due to various reasons, mainly the decrease in purchasing power of consumers. Other reasons include high interest rates, increase in fuel prices and decrease in production of vehicles.

“There are not much details about the venture, however, such agreements are signed after years of working and negotiations,” Pakistan Association of Automotive Parts and Accessories Manufacturers’ (Paapam) former chairman Abdul Rehman Aizaz said while talking to The Express Tribune.

“Until April 2022, the auto industry was booming and the current situation was not in the wildest of dreams. Rising inflation, widening current account deficit and fall in foreign direct investment are contributing to the slowdown in Pakistan’s economy,” he added.

Referring to Dewan Farooque’s TLA, Insight Securities’ auto analyst Asad Ali remarked that the development would put Lucky Motors in direct competition with Dewan Farooque as currently SUVs, crossovers and hatchbacks of Kia were being assembled by Lucky Motors.

Published in The Express Tribune, November 8^th, 2022.

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